Through a Migrant’s Lens
 

Illustration by Thuan Pham

Many experts and analysts have written and spoken about the causes and impact of the Russo-Ukrainian War, filling the airwaves with answers to our questions. Though not recognized as experts, nor recent migrants, three Wichitans agreed to share their experiences as Belarussian/Ukrainian/Russian transplants, each qualified because of time spent absorbing the traditions, beliefs, and mettle unique to the people of those countries.

Edward Genin

Of the over 425 people in attendance, Edward Genin’s perspective on Vladimir Putin’s war with Ukraine struck a discordant chord, he agrees with much of what former Wichitan, CIA Director, and Secretary of Defense Robert Gates conveyed as the inaugural speaker for the Craig Barton Speaker Series at Wichita State University’s Wiedemann Hall on April 27, but he disagreed with the tone and lack of cultural knowledge a non-Eastern European native possesses when discussing the War.

Perhaps an issue of time restraints or omission, Genin wanted to hear more from Gates during his WSU appearance about the extent that Putin and other Russian leaders “have been engineering aggressive imperialistic actions very deliberately for decades, like incremental gains in Georgia, Crimea, Donbas.” More about Putin’s secret communications with China. More about the Russian government’s "bait and switch" tactics, when, for example, citizens are lured by 3 to 6-month contracts to work at shipyards, but then placed into uniforms and combat in Ukraine.

Genin was born in Minsk, Belarus, then migrated with his parents and sibling in 1989 to the United States, where he and his family worked hard to build his business acumen. Currently, Genin operates an outsourcing entity located in Ukraine, while he, his wife, and son live in Wichita.

Genin has other theories about Eastern European culture and its impact on regional wars, and vice-versa. When asked about the cause of the Russian invasion of Ukraine in February of this year, Genin said he believes that all wars happen in part to boost nations’ economies, to create infrastructure, and to collect more taxes to build a revenue base.

“War starts for full employment to produce military equipment,” he said. “War happens when a nation has limited resources. Russia is looking for more land, more resources in Ukraine.”

Genin is skeptical about those who profit from war, those who may place profits over patriotism. “Who is making the money, where will the assets go?” Genin points to U.S. and Soviet failures in Afghanistan and other prior war zones to recover military equipment and other assets as a major concern for Western nations that are currently supplying Ukrainian forces with military weaponry. “Those weapons often wind up in enemy hands.”

Ukraine once was a launching point for Soviet missiles, including nukes, until a 1994 agreement led to the transport of those weapons to Russia. Ukraine’s agreement to relinquish the world’s third-largest nuclear arsenal, which the country inherited from the collapsed Soviet Union, and transfer all nuclear warheads to Russia for dismantlement. The signatories of the memorandum pledged to respect Ukraine’s territorial integrity and inviolability of its borders, and to refrain from the use or threat of military force. Russia breached these commitments with its annexation of Crimea in 2014 and aggression in eastern Ukraine, bringing the meaning and value of security assurance pledged in the Memorandum under renewed scrutiny.  

“Russia has a tendency to point blame at previously celebrated leaders turned evil, this is how state media portrays Gorbachev, hard-liners believe he should have never given up the entire Soviet empire of satellite countries.”

Genin, who regularly monitors events in the affected areas of Eastern Europe through news sources and human contacts said Russia will play the long game by gaining those resources and then avoiding economic sanctions by bartering with other nations, like China.

That said, Genin doesn’t believe this will necessarily save Putin’s status. “At some point, Putin will be replaced. Oligarchs will become sick of the war in Ukraine, the economic freeze on their assets will hurt them to the point of pressuring the Kremlin for change.

Though Gates did emphasize in his speech that Putin is risking his reputation on rebuilding the Soviet Union, post the 1991 acceptance by many nations that the Cold War was over, Gates understated Russian growth in power during the interim, according to Genin.

“Unhappy soldiers will come back to Russia with guns and ammunition, they don’t want an unstable Russia. It’s about who controls the button through the Russian channels.”

“The reason Russia is not performing well is that Ukrainians are fighting for their land, and Russian soldiers are their brothers, so Russian morale is low.”

“This war will continue,” beyond an inevitable truce or peace treaty, Genin said. “The pride of the Ukrainian people will go for generations, much like the Palestinian-Israeli battle for territory.”

Rabbi Shmulik Greenberg

Worldwide, Jewish organizations are assisting Ukrainians of all faiths to migrate to safer countries, Rabbi Shmulik Greenberg is leading that movement in Wichita. Greenberg once led a congregation in the major Black Sea port city of Odessa, Ukraine, the third most populous with just under one million people.

Though his Jewish grandparents had been rounded up during World War II, and now there are elderly Jewish people in Odessa that feel like they could be targeted for a second time, Greenberg said that he believes the 30,000 Jews who have migrated from Odessa are escaping the violence of war in Ukraine, not avoiding anti-Semitism.

“Putin opened Jewish schools across Russia, and today it's closer to a Jewish Renaissance in that region of the former Soviet Union,” Greenberg said. “But obviously the war today is a travesty, it's terrible.”

Greenberg wanted to point out that he “feels very much that people from all across the world have stepped up to the plate and contributed funds and goods so that Jews and non-Jews alike do have the ability to escape the dangers of the War.”

 “In America, it's easy to lose focus, life continues,” Greenberg said. “But not in Odessa and in Ukraine, people need as much help as they did when the War began.

 “People need to not forget in terms of refugees escaping Ukraine.” he continued. “Most of them are not looking long-term at the countries close by as much as they are traveling to Germany, Israel, and the United States. Most will not return to Ukraine.”

 Ludmilla Fridman

As with the previous two contributors, Ludmilla Fridman sees the War in terms of Ukraine’s urgency to make immutable its right to self-determination. “Ukraine needs help militarily,” she said. “It should win to become its own country again, to join NATO.”

Fridman was born in Chernivtsi, Ukraine, in the western part of the country near the border of Romania. As a teenager, Friedman and her family left to live in Moscow, her home for several more years until coming to the United States in 1981.

A few years ago, Fridman returned to Ukraine and found virtually nobody that she knew was left. She was shocked that the Soviet Union dissolved, and that attitudes changed. “The people were so hospitable, it was very different than before.” For example, Fridman said, in the service industry, when approaching an employee in a store, she used to receive rude treatment because she was Jewish. She felt that Jews were always “under watch,” and given the history of the Holocaust, and Eastern European pogroms, caution might be expected. However, during her visit, well after the Iron Curtain was lifted, she felt that “Ukrainians are more comfortable with the Jewish community and that communications are much better between Western and Eastern European countries.” No derogatory comments nor nasty looks. “Zelensky is President, and other Jewish people are in his government,” she said. “Many Jews fight for Ukraine, they believe that it is their country.”

The same applies within Russia, Fridman said that there's a higher level of well-being not any indication anti-semitism Jewish Freedman said the Moscow is full of Islamic people and that Putin probably has more on his mind for “this is the least on his mind is too worried about religion,” But tolerance has its limits, especially if individuals or groups contest governmental actons. “It is dangerous to speak out against the war, people wind up in jail,” she said, “I just read an article about a professor who was arrested for supporting Ukraine.” Similarly-themed stories abound found with a quick internet search.

Though seemingly more religiously tolerant, Fridman holds no illusions about the long-term intent of her former country. “In my eyes, Russia has always  been an invader.” She believes that Russia is continuously trying to expand and defend its country, often justifying forward military action by saying that other nations are trying to invade its land. “This is what Stalin meant after World War II, and this is what Putin tells the people in Russia today.”

Propaganda runs thick in wartime, when Fridman heard about the February Russian campaign suggesting that one goal of the Russo-Ukrainian War is to remove a Neo-Nazi movement in Ukraine, she women said that “it's a lie, the Ukrainian people are just people. That's only a pretext to invade.” Fridman does believe that Russian propaganda is very powerful. She remembers as a teenager hearing the pro-Soviet Union messages and they filled her with pride and inspiration. But after leaving to live in the U.S., her viewpoint changed about one-sided government media.  “Listening to the state-controlled TV station for a week is just like listening to Goebbles” during the Nazi regime of World War II.

In terms of Russian socialism, Fridman’s  experiences portray the economic system as more of a kleptocracy. “Russia steals from the top down.” She says that people refer to it as socialism, but taxes are both transparent and hidden, and when a service is described as “free,” that means “it is of very poor quality.”

As for dramatic social and economic change after the collapse of the Soviet Union, “Look at how fast satellite nations became independent,” she said. “Their real self showed up.”

All three participants believe that a Ukrainian victory is essential to not only stop Russian expansion, but also to provide something the Ukrainian people are demonstrating they’re willing to die for, their freedom.

 
Steve Witherspoon
Impregnable Precincts
 

Illustration by Thuan Pham

By 1900, most states in the U.S. required the Australian ballot process of voting, one where uniformly-printed ballots, funded with taxpayer dollars, are notably cast in private. Institutionalization of this process addressed several ills: candidate-printed ballots, some leaving out opponents (Lincoln was omitted on ten southern state ballots during the 1860 election, for example), and all manner of intimidation – imagine a voice vote, or specific candidate-colored ballots, where those electorally offended around you could settle the score after all votes were cast.

Today, in spite of still following the basic initial tenets of the Australian system, we lament the lack of faith by much of the American public in our voting process. Historically, the reasons abound as reported in these articles pertaining to presidential elections:

                2020 Election turmoil

                2016 Russia, Russia, Russia!

                2000 Florida ballots recounted

                1960 Ballot box stuffing?

                1876 Reconstruction compromised

                1860 A nation divided

                1800 A need for the 12th Amendment

Reports of malfeasance during the 2020 presidential vote tallies were rampant, but, according to many election officials, unfounded. Still, questions persist. Were machines rigged to provide a desired outcome? Did vanloads of mysterious mail-in ballots get counted to sway final vote counts? Do canvassing boards consistently and fairly evaluate the validity of questionable provisional/mail-in voter ballots? Is it acceptable for mail-in ballots to be mailed to all voters, registered or not?

Granted, Kansas counties are not lightning rods for controversy over voter fraud, but an analysis of three county’s election processes could provide meaningful criteria for the public to consider when  determining voting security. Each county’s election officials were asked about the integrity and efficacy of voting machines and why they believe their county’s mail-in ballots are processed accurately and securely.

Jenna Fager and Donna Patton, Reno County Clerk’s Office

We believe Reno County’s voting machines are secure and accurate in counting votes for several reasons.

  • Contrary to what some believe, our voting machines are never connected to the internet. This has always been our policy and it is illegal to connect any machines to the internet.

  • We test every voting machine prior to election day to ensure votes are counted correctly. This process is open to the public.

  • We test every voting machine post-election day as well.

  • There is a random audit done after each election where a bi-partisan board hand-counts the race for the precincts selected. Reno County’s count is always accurate.

 We have several processes in place to assure that our mail-in ballot system is secure and accurate.

  • Each registered voter must complete a mail ballot application for each election to receive a mail ballot. When that application comes in they must include their Kansas ID # or a photocopy of their government issued ID. We check this number through KDOR. We also check the persons signature against the signatures we have on file from their voter registration.

  • When we send mail ballots out, we give each envelope a unique tracking number and barcode. The voter must return the ballot in this envelope and sign it.

  • When we receive ballots back we log them in as returned so there is no way a person can vote more than once. We check the number and put them in numeric order. We also check the signature to make certain it matches with our records. If we ever question a signature we make contact with the voter.

  • We check the postage date of the incoming ballots to make sure the vote should legally be counted.

 As for  the number of ballots that need additional scrutiny, Fager said:

“The number of provisional ballots vary widely and typically increase with voter turnout. In 2020 there were 861 provisional ballots considered and only 3 mail ballots that required adjudication. In 2018 there were 440 provisionals, and no mail ballots, that required adjudication.”

Angela Caudillo, Sedgwick County Election Commissioner

Caudillo recommends watching these videos, created by the Kansas Secretary of State’s office, to better understand state policies regarding how to secure the voting process in all 105 Kansas counties:  Sedgwick County Election Security videos

Per the type of voting machines and software the county uses, and the way Sedgwick County handles questionable ballots, Caudillo said:

 “We have Election Systems & Software equipment. In Sedgwick County, we also require mail-in voters to sign the envelope containing their ballots. If a signature does not match, we reach out to the voter to give them the opportunity to cure the issue. If not cured before Canvass, the Board of County Canvassers will adjudicate those ballots. It is not uncommon to have provisional ballots, including those with challenged signatures, in every election.”

 Tatum Stafford, Butler County Clerk

  • We’ve never had a breach of voter information

  • We utilize military grade software, secure USBs, and of course, secure passwords

  • Our voting machines use paper ballot verification

  • For mail-in ballots, the ballot envelope includes a voter signature line and we compare each one to the signature on file with voter registration; if we see a significant variation, we do try to reach out to people for verification – some people may have had medical conditions, for example strokes, or simply rushed their signature.

  • Our Kansas-required canvassing  board investigates all provisional ballots and those with questionable signatures; sometimes it’s because of name changes.

  • We trust in our process, it has worked for years

Nationwide, election integrity controversies have dominated headlines, and over time, as technology advances, campaign managers, pollsters, and media pundits increasingly possess the data to pinpoint who is likely to vote, and for which candidates in “must win” states, counties, precincts, and even households. Consequently, previously anonymous local election officials have been thrust into the bright lights of public scrutiny, sometimes scalded by questions of process and commitment to getting it right. Locked voting machine rooms, passwords, machine paper ballot backup systems, signature comparisons . . . will that be enough to ensure the public’s confidence in election results when winners are too often decided by hundreds, or tens of votes? Will that be enough when the outcome doesn’t jibe with trusted polling numbers s projecting wins for powerful political conglomerations?

Look no further than the proposed Kansas abortion amendment vote fast approaching on August 2, which coincides with contentious Kansas primary races. It’s incumbent on all election officials to avoid malicious breachers, and to maintain the trust of Kansas voters.

 
Steve Witherspoon
Ukraine’s Shifting Red Line
 

Duga radar system, Photo Courtesy of Yves Alarie

Former Wichitan, CIA Director, and Secretary of Defense Robert Gates became the inaugural speaker for the Craig Barton Speaker Series at Wichita State University’s Wiedemann Hall on April 27, and he entertained the audience with wit and wisdom while discussing solutions and directions for United States’ officials regarding several serious global issues facing the country. 

Gates scolded the U.S. government for becoming complacent in recent decades by shutting down programs and offices directed toward the former Soviet Union and China. He said that Chinese culture has developed for thousands of years and that over the past few,  Xi Jinping has aggressively advanced his Belt and Road program throughout Africa, the Middle East, and other parts of the world to extend Chinese influence. He also cautioned Americans not to consider the 1990s to be the end of the Cold War because Russia still possesses thousands of nuclear weapons, and Russian President Vladimir Putin is eager to return his country to the level of world power it possessed as the post-WWII version of the Soviet Union.

“Without Ukraine there is no Soviet Empire,” Gates said. “Putin is in a battle for his political success, and he's obsessed with Ukraine.” Gates stated that another concern about the Russian leader is that currently there's limited access to Putin, only his “military cronies” are by his side to advise him. Gates agreed with Western military experts that the first weeks of Russia’s attacks on Ukraine have been ineffective and embarrassing to Putin’s image with Russian hardliners. 

One weakness hindering Russia’s success during the first weeks of the war is a common one for combatants. “The Russian army is probably the most railroad dependent army of any major country,” Gates said, “and once they get away from their own rail depots, 50, 60, 70 miles, they begin to have significant logistical issues due to fewer available trucks” to take supplies where they're needed. Gates said that the current administration has been slow to respond to the crisis in Ukraine, but President Biden is now finding a bipartisan Congressional voice, and stronger mobilization of NATO resources so that the US government can be more forceful. “Putin was counting on a divided West and a divided NATO.”

“Putin made terrible mistakes in the first phase of the attacks, but that does not preclude a Phase II,“ Gates predicted. “He wants to take Donbas, Mariupol, and Odessa.”

“In the near abroad, other former European Soviet States, Putin would like them to bend the knee to Russia's aspirations and policies,” Gates said during an April 13, 2022, C-Span podcast

“Putin calls for a change of government in Ukraine, and wants Ukraine to abjure from ever being a member of NATO,” Gates said. When he was Secretary of Defense and met with Putin in person, Gates said he saw the eyes of a stone cold killer. 

“Putin wants NATO to move back its lines from where they stood in 1997,” Gates stated. ”It's not about re-establishing the Soviet Union, but rather going back to the Russkiy mir,” the Slavic core of the Soviet Union: Russia, Ukraine, and Belarus, a region noted for its convergence of Russian history, language, and diverse culture.  

When asked what the U.S. or NATO would do if the Russians detonated a nuclear weapon against Ukrainian cities as Putin and Russian officials have threatened, Gates said Western nations should not respond in kind, but if it was a limited Russian strike, the U.S. would be empowered to reopen the conversation of a Ukrainian no-fly zone and implementing concrete strategic decisions for sending heavy machinery to Ukraine. Gates said that the U.S. and its allies can't be deterred by Putin's nuclear threats because “that would send a message to Iran, North Korea, and China to use the same threats to accomplish their goals.”

Gates said the way the U.S. would impose a no-fly zone is first of all to go in and destroy all of Russia’s air defense systems in or near Ukraine. “That's fundamentally an attack on Russia, and the Biden Administration will have to continue to walk a fine line to avoid WWIII.”

“So far the U.S. has walked that line pretty well but the calculus can change if Russia escalates,” Gates added. “The United States is not in a position to quickly send heavy arms to Ukraine, but Czechoslovakia and other nations in Eastern Europe may be willing to.” Gates said that the Czechs and other Slavic nations could send NATO-supplied tanks, air defense systems, and training specialists to Ukraine. “The United States should encourage these Eastern European countries to provide weapons to Ukraine with the promise that the United States will replace those weapons with more modern equipment.”

When asked what's the greatest national security threat to the United States, Gates said his consistent response is “that it's found within the two square miles that's encompassed with the White House and the Capitol building. We've always had polarization, it’s the paralysis when we can't get to the local and U.S. issues that is a true danger. Ukraine might be a point where the U.S. can overcome this paralysis.”

With regard to the difficult decision of sending troops into battle, Gates said that the president has to believe in himself or herself, and has to be able to persuade the American people that risking those lives matters, “that this isn't some unrealistic objective that the president is giving them, that this a mission that they can perform and carry out, and that the president . . . that the secretary of defense can look at parents in the eyes and say: ‘What your child did mattered and it mattered for our country.’” 

Gates said of Putin “I think the odds of him using chemical or nuclear weapons is at this point pretty low for a couple of reasons. First, biological weapons are essentially uncontrollable.” Gates went on explain a second reason: U.S. intelligence indicates that no Russian subs are leaving ports, and no strategic nuclear aircraft have been detected. “At this point, Ukrainian troops are not densely packed so the threat of nuclear weapons is more about breaking the will of the Ukrainian military and government.”

Michael George, who served in the Joint Staff at the Pentagon during the 1990s, said that this upcoming week will perhaps reveal a great deal about Putin’s intentions because on May 9th, the Russians will conduct a Victory Parade celebrating the 77th Anniversary of the end of WWII in Europe which will stir up a stronger sentiment to become more aggressive in achieving its Ukrainian war goals. Speculation is circulating that the Russians might actually use a nuclear weapon in Ukraine if the steel plant attack in Mariupol fails. “The attack could occur via an aircraft or a bomb located in a truck,” George said. “On the other side of the equation, there is the possibility that Putin will be taken out of power if he resorts to limited nuclear missile attacks.” 

 
Steve Witherspoon
Of Chief Importance
 

Illustration by Thuan Pham

“Shots fired at Towne East!” What level of force is needed to stop this violence? How many active shooters are involved? What other information is provided to responding officers?

A 911 call leads to a confrontation between police officers and a man experiencing a heightened mental illness crisis; subsequently, a police officer is critically injured by the suspect, who had been hiding in a shed with an assault-style rifle. How could this situation have been handled differently?

With nearly 600 officers to patrol behaviors of over 392,000 Wichitans, the next Wichita Police Department chief will need to address several questions pertaining to the procedures and processes that can determine the difference between life and death, freedom or imprisonment, and the general feeling of safety for an entire community.

The selection process to replace retired Police Chief Gordon Ramsay has begun, and City Manager Robert Layton is in position to extend the contract to the candidate who will be vetted by the community at large through public discussion, and through a few chosen city leaders. The City Council voted unanimously on March 8 to award an $58,000 contract to Public Sector Search & Consulting Inc., a national search firm that exclusively recruits police chiefs for cities. The consulting agency is expected to provide police chief candidates by the end of this summer.

Layton calls for a new police chief who is “experienced, approachable, and collaborative,” a leader who will be “expected to expand upon the innovative policing practices and community engagement efforts of the department,” with established traits of openness, transparency, and the ability to achieve community policing and outreach within diverse populations. He also said he wanted department input in the decision, and prefers at least nine years of law enforcement experience, three years or more as a supervisor or administrator.

Sedgwick County’s lead prosecutor, District Attorney Marc Bennett, would like the police chief to have knowledge of how to conduct mental health services. “This is an issue in nearly every city in America,” he said. “The new chief will need to have an understanding of the issue, be willing to pursue effective collaboration with non-law enforcement stakeholders in the mental health community, advocacy groups, philanthropies and county and city government.”

Bennett also wants the chief to continue to develop stronger ties between officers and the neighborhoods they patrol. “Community relations and community-based policing are more important than ever, but for any community to have trust in their law enforcement agencies, they have to know that the officers understand how to conduct a quality investigation,” he said. “This is no criticism of the current department, but I would want to know that the new chief also considers quality investigations a priority.”

Bennett said he’s comfortable with an internal or external candidate. “Both approaches have their advantages. Someone from outside can bring fresh ideas and is not burdened by ties to any individual or organization. That said, it’s asking a lot of a person to arrive in a city and immediately be expected to run an organization as large as the WPD with as many responsibilities as the WPD is obligated to handle, with no institutional knowledge. This approach of bringing in someone from the outside to be a new police chief is an accepted practice nationally — but it really takes the right fit to work.”

Another form of engagement that many community leaders advocate is that with members of the public in non-confrontational situations, like those found with community policing.

NAACP President Larry Burks, Sr. emphasized the same ideas that many leaders around the country have demanded from law enforcement leadership: transparency, communication, diversity, and a willingness to change the approach to the profession.

Police are supposed to “protect and serve,” and Burks said it’s inherent that responsible leadership is willing to make changes in policy; employees who engage in activities that don’t meet law enforcement standards shouldn’t be in the job.

“We need assurances,” he said. “We need open communication with the department to maintain trust.”

Burks also believes that the new chief needs to be qualified with law enforcement training, even FBI experience, have worked at the grass roots level, be proficient at budget management, and hold a reputation of responsibility and respect as a leader. “That said, we must give the new police chief time and grace, time to get to know the community and its issues and then implement changes, better solutions,” he added.

Burks believes the Wichita Citizen’s Review Board is critical to transparency and disclosure with police-involved shootings and other potentially controversial, litigious incidents. The most active citizen oversight boards in the U.S. investigate allegations of police misconduct and recommend actions to the chief or sheriff, and Burks believes that Wichita’s board must also display strength while seeking truth and justice for all citizens, including law enforcement officers.

“Camera footage, using discretion, for the legal protection of rights is crucial,” Burks said, “While an investigation is ongoing, after a certain time frame, the Citizens Board needs to see it.” Burks noted that video footage doesn’t answer all questions to determine guilt during an incident, but it’s needed to establish factual evidence, and to maintain trust between the police and the public. Wichita’s police department authorized use of body-worn cameras in 2014, and by 2019, the department announced it would implement 539 of these cameras to officers and field sergeants.

“Our next police chief needs the moral courage to do the right thing, to lead by example,” Burks said. Referencing accusations of racist tweets by current and former police officers, Burkes asserted that “bad behavior by some shouldn’t taint remaining law enforcement.” He hopes that difficult confrontations end with all participants able to return safely back to their families. De-escalation training is the key to that outcome, Burks believes.

Many policing strategies have been implemented in the U.S. over the past few decades to decrease all forms of crime, especially violent acts. From “broken windows” to focused deterrence, crime reduction and community response has produced mixed results, but given the national focus on law enforcement procedures over the past two years, Wichita’s next police chief will face numerous, very challenging questions from various local groups on these critical topics.

 
Steve Witherspoon
Housing Assistance Afforded
 

Photo: Candor Visuals

Too many dollars chasing too few products is the oft-repeated explanation offered by economists as inflation rates rose last month to 7.5%. American consumers are facing higher rates at the grocery store, online, and at dealerships — don’t rush to purchase any Porsches or Bentleys, that won’t end well.  Making the cost of living worse, homebuyers and renters are experiencing life-changing sticker shock. National median home purchase prices are up over 20%, and the median cost of homes is now over $180,000 in the Wichita area. Construction costs and supply chain issues are uniquely affecting new building feasibility, and renovating existing structures involves similar challenges.

Can’t make the commitment to an inflated down payment? Renting options aren’t trending any better. Nationwide, rental prices elevated 14% from 2020 to 2021 .

Some current examples of reasonably affordable rental housing in the Wichita area reveal prices spanning the $400 to $1400 per month range, with square footage, number of bedrooms and bathrooms, and proximity to work, shopping destinations, and schools topping the list of rentee considerations.

How affordable are these prices for Wichita area buyers and renters? According to the Wichita Metro Area Occupational Wage Survey, Wichita MSA average annual pay is $44,923. That is $11,938 or 21% below the national metro area average of $56,861. Shelter is within reach for most, but recent increases have stretched  budgets beyond projections.

What federal and local assistance is being provided? Billions of dollars are flowing across the country, attributable to Housing and Urban Development (HUD), local housing authorities, and several charitable organizations. Here are some local entities which are charged with providing opportunity and assistance to those needing affordable housing, and to those willing to help provide it:

  • The Wichita Housing Authority (WHA) serves Sedgwick, Butler, and Harvey counties, each offers waiting  list alerts to allow buyers and renters to quickly respond to a limited supply of housing opportunities.

  • WHA Housing Choice Voucher (HCV) Program is designed to help income-eligible families pay their rent to private landlords. HUD determines the rules and regulations for the Housing Choice Voucher Program, eligibility is determined using 2018 Federal Adjusted Income Limits. The HCV Program allows families to choose the type of dwelling as long as it meets certain requirements. Eligible participants must choose a dwelling within Wichita City limits. The landlord retains private property rights, including management, tenant selection, and maintenance. Some qualified renters choose to purchase HCV properties.

  • Participants pay approximately 30 percent of their adjusted income directly to the landlord. WHA subsidizes the balance of the rent. The WHA currently administers over 2,500 vouchers, with a value of approximately $12M.

  • The City of Wichita administers Wichita Housing and Community Services, which helps allocate funding, and ensure compliance of federal and local rules. Some of the implementation of its goals are covered in its Annual Action Plan. The 2019-2023 Consolidated Plan provides a basis and strategy for the use of federal funds allocated to the City of Wichita by the U.S. Department of Housing and Urban Development (HUD). The City is scheduled to receive Community Development Block Grant (CDBG) funding in the amount of $2,968,676, HOME Investment Partnerships Program (HOME Program) funding in the amount of $1,519,843, and Emergency Solutions Grant (ESG) funding in the amount of $250,208.

  • The City of Wichita is an Entitlement City and as such, receives funding directly from HUD according to a formula, and in amounts determined by Congressional appropriations.

  • Following are the fund categories which are a part of the City's Entitlement allocations:

    Community Development Block Grant (CDBG)

    HOME Investment Partnerships Program (HOME)

    Emergency Solutions Grant (ESG)

  • Each year, the City Council appoints a Grants Review Committee (GRC), which includes representation from the six City Council districts, Unified School District 259, Wichita State University, large and small business, Wichita Independent Neighborhood Association, United Way of the Plains, and Sedgwick County. The GRC reviews proposals for CDBG-funded public service activities, including funding for domestic violence shelter services, youth crime prevention and enrichment and proposals for HOME Investment Partnerships Program CHDO Set-Aside funding

HUD boasts several recent goals and successes: to nationally involve narrowing the digital divide between users and mortgage-related service providers, streamline data services, reduce fraud and abuse, and to improve the quality of data collection. HUD budgeted $41.3 Billion in 2021 for housing services to assist American homebuyers and renters, with allocations targeted toward disabled and homeless residents. Another $5 billion was added last year through the American Rescue Plan.

The Cares Act allowed HUD to waive some statutes and regulations for public housing, and expanded HCVs for new applicants while helping others retain housing. The Wichita Housing Authority Landlord Incentive Program attempts to help area homeless people connect to, and navigate, WHA programs.

 
Steve Witherspoon
Appraising Housing Affordability
 

Photo: Candor Visuals

For those who would help build aircraft to expedite the Allied Powers’ defeat of Germany and Japan during WWII, Wichita assisted the federal government in its plan to construct inexpensive housing. In 1941, through Franklin D. Roosevelt’s Federal Housing Administration, 400 new homes would accommodate many of the anticipated 30,000 people new to the city. As the estimate proved woefully inadequate, hundreds of additional dwellings were constructed, and the developments known as Hilltop Manor, Beechwood, and Planeview were born.

From 1940-43, the Wichita area became internationally known, and enemy-targeted, for its ability to successfully produce not only the Stearman Biplane to train those who would pilot war planes, but also Boeing’s B-17s and B-29s. Wichita’s population grew from almost 115,000 to nearly 190,000 (225,000 in the metro area) so housing was needed fast and cheap. The first 400 homes were built at an average cost of $3,500 and the working  class buyers would not be asked to scrape together a down payment.

Since then, much like the rest of the United States, the local economy has seen its share of favorable tail winds, and great turbulence, of stagnant growth and real estate bubbles. Affordable housing, based on a renter or buyer’s current and future income, is often explained by the 28/36 formula: your total monthly housing expenses should not exceed 28% of your gross monthly income, and no more than 36% of your total debt service, which includes credit cards and car loans. Pressuring that formula, recent data shows average monthly rent has risen 14% nationwide from December 2020 to the same month in 2021, and nationwide, the median price for an existing home swelled by 23.4% between June 2020 and June 2021.

Abiding by mortgage company rules has proven elusive for many Americans and the pandemic has furthered the dilemma by adding building material shortages, high inflation, increased construction and labor costs to the challenge . . . how can monthly rent and mortgage payments be reasonably reduced to paycheck-friendly levels?

Here are some of the ways local governments and private entities have attempted to reduce housing costs:

  • Bond elections, mostly via municipal bonds

  •     Public funding trusts

  •     Opportunity Zones

  •     HUD, through underwriting homeownership for lower- and moderate-income families through its mortgage insurance programs

  •     Tax breaks, incentives to developers to include low-income housing units within the larger project

  •     Change zoning laws to allow high density dwellings, often in the form of apartment complexes, versus single-dwelling units

  •     Rent control

  •     Land donations by government bodies or private entities

  •     State and local funding for neighborhood revitalization

  •     Mortgage forbearance, eviction bans

Local real estate developer George Laham is familiar with the concept of low-income housing set-asides, units priced below market value, when negotiating land deals in the Wichita area. He believes that the pandemic increased the need for affordable homes and apartments across the income spectrum; “stay in place” restrictions also altered consumer expectations for housing.

“The lockdown created a new reality for people, we were trapped in limited space, turning our homes into schools and workplaces for parents – we took our living space for granted, our routines changed and how we viewed what our living space can be,” Laham explained. “People began fixing up their homes, reinvesting  to make their homes function better.”

But because houses and apartments are in short supply, especially given a need for more square footage, prices have risen, and Laham has seen single-dwelling home sales turn into bidding wars. Though current housing prices and economic currents seem to bode poorly for buyers and renters, he predicts post-pandemic lockdown optimism. “This will not last, though interest rates will increase, and inflation is high, these economic conditions will balance out over time.”

Other factors affect housing costs, as Stan Longhofer, Director of WSU’s Center for Real Estate points out in a research report issued a year ago. He describes external obsolescence as  a form of depreciation, something that can lead to wide property values over the years; changes in traffic flow, severe weather events, or declining upkeep of neighborhood houses are potential examples that can impact a home’s longer term value. Longhofer also points out in another research paper the crucial roles of area demographics and wealth distribution in the real estate market, examining the degree that age, race, and wealth help determine property values.

Changing norms in the 21st century have already disrupted the traditional path to home ownership, and renting has become more pragmatic for the transient, job-changing lifestyles of succeeding generations. What hasn’t changed? Many of the homes classified as temporary when erected in the early 1940s still stand, and for too many buyers today, the difficulties of affording a place to shelter remain formidable.

 
Steve Witherspoon
2022 Resolutions Declared
 

Illustration by Ainsley Christofferson

It’s that time of the year, Fourth Quarter reports are submitted, First Quarter forecasts analyzed, and when the end of the workday arrives, we head back home to determine whether our personal lives are trending upward. The 2020-21 mirror has not been kind to many of us in terms of nutrition, exercise, and many other forms of personal care. Beyond Maslow’s hierarchy baseline of physiological need, how far from transcendence have people slipped, and what will we do to continue ascending, to self-actualize?

After scouring newspapers, online lists, and other sources dedicated to understanding what we want to accomplish in this potentially post-pandemic period (please!), here are a few of the typical tips and goals that emerged:

  • Social media breaks — with the combined blitz of contentious Covid-19 policy shifts, looming 2022 midterm elections, and rising incidents of online criminal activity, less screen time in general might be a good way to reduce stress

  • Pre-plan entertainment — travel may still be limited, but family and friends are proving to be more of an option to share fun activities with; if the pandemic wanes, numerous other options should fill your calendar

  • Finish a project in home or otherwise — as with all goals, set realistic timelines and expectations, the rewards for home repair and improvement can be very satisfying

  • Rest better, longer — seek out what works for you, many medical sites link a good night’s sleep to building your immune system, and to realizing stronger cognitive skills during the waking hours

  • Exercise, Exercise, Exercise — utilizing a FitBit is one way to track how active you are during the day; other technologies are expanding our ability to address a multitude of health issues

  • Stop/moderate vices — addictions to a wide variety of vices can be debilitating, identifying what triggers your perceived need for harmful substances is a first step; many of the tips listed here are ways to combat temptation

  • Consider therapy to battle stress and anxiety — cultures around the world are embracing therapy as a positive way to deal with mental health disorders; the stigma has fallen, compare today to these events in 1972

  • Read more, especially Candor! — so many lists of great books, find time to clear your schedule and locate a quiet place to read whatever you’ve been craving — Candor isn’t a bad place to start!

  • Purge — stuff around the house, on your work desk, anywhere you frequent, can add to personal stress; like any project, set realistic goals, then fill the bins at Goodwill, a local recycling center, or the cart outside

  • Do housework regularly/immediately — like the need to purge, psychologists recommend decluttering and cleanliness to reduce stress, and to increase hygiene, especially during the pandemic

  • Expand your food options, plan ahead to avoid bad choices —for some, being at home more has heightened a desire to enhance cooking talents and options; planning ensures the right ingredients are available when needed

  • Donate time, give what you can to your community — so many options, so much need; investigate charitable organizations, some are more vigilant toward ensuring targeted resources reach those in need

  • Reinvent yourself — the labor market is screaming for workers, this could be the time to retrain and enter a different vocation; or, dive into an a hobby loudly calling to you, Extreme Ironing, perhaps?

Here are some resolutions from Candor participants, which will inspire you in 2022?

My new year's resolution for myself and for others — To remember to think and act like Americans first, family members second, our friends, neighbors and co-workers next, and political party affiliation last (ideally not at all, except when in the privacy of a voting booth) — Robert Litan

I think my resolution this year will be to fast. I'm looking to fast in a variety of ways. First of all fasting from the overabundance of food and various media. Then exploring other ways to fast such as a fast from spending or just too much activity. In general, simplicity and recognizing the amazing abundant blessings. I'm not sure how well I will be able to accomplish this but certainly going to give it a try. — Amy Bragg Carey

As we enter 2022, I, for one, refuse to bow to the notion that 2020-21 has solidified a "new normal.” It wasn't and it won't be. I resolve to be a voice encouraging my family and my friends not to "settle" for less than they hoped for, worked for, and expected some two years ago. We owe that to ourselves, our community and our nation. Let's get after it. — Al Higdon

I would like to practice more patience, kindness and LOVE more. — Teresa Houston

Nearly two years into the pandemic, the costs of not doing what I can to keep myself healthy — simple things like eating less and exercising more, and taking advantage of the health supports which my job blessedly provides me with — have become undeniable. Too many people I know who have died too young. This isn't about getting vaccinated and boosted; those are no-brainers, as their health benefits are obvious. I'm talking about realizing, as I turn 53, that I know how to take care of myself, and I'm not doing it. This year, I want that to change. — Russell Fox

My resolution for this year is to focus on my overall health — mental, physical, and emotional. This pandemic has shown me so much about myself. I have grown in ways I never could have predicted and have had amazing opportunities to use my skills and knowledge to truly impact a community. Along with the amazing things though, it has also shown me that I am quick to work hard to check a box and accomplish tasks without considering my overall well-being. I know that in order to continue, to move forward with all my goals, I need to make health the number one priority before I continue down this path and mobility and energy become a problem for me. So in short, keep an open mind to opportunities that sound scary, focus on overall health (not just exercising), and enjoy my two amazing kids and husband that all sacrificed a lot of time with me over this past year. — Sarah Nickel

My NYE resolution is to refocus on my friends who remained steadfast through multiple severe personal and professional challenges in both 2020 and 2021. Fairweather "friends" just aren't. — Ben Blankley

In 2022 I am resolved to consider the ways that the family, not the individual or society, may be the ecological entity that sustains balance across the events on the planet by tying all other things together in ways we have not appreciated. My keyword is CRUSH ... Covid Reminds Us: Stay Home. I fear we have failed to value home as our primary PLACE and family as our greatest WEALTH and that this failure has corrupted our economic actions and set a broad and poorly understood ecological judgment of our organic planet into motion. — Bob Love

For my community, I will continue to urge “Sustainability” (a code word for adjusting to this Climate emergency) in front of the City Council, the Bicycle Pedestrian Advisory Board, the Democrats and the Unaffliateds, the League of Women Voters and hopefully eventually the County Commission.  For me personally, I will rethink previous behaviors such as driving alone to shop and to walk, wasting food and plastic, and lessening the water I use in showers and dishes. Best wishes throughout this still-new year. — Jane Byrnes

 
Steve Witherspoon
Institutes for Higher Earning?
 

Illustration by Thuan Pham

NIL Paydays

Tiger Woods signed a five-year, $40 million contract with Nike while a 19-year-old in his second year at Stanford, he never returned to complete his degree in Economics. Michael Jordan left North Carolina after his Junior season in 1984 and signed a seven-year, $6.3 million contract with the Chicago Bulls. He returned to Chapel Hill to complete his Geography degree in 1986. In 2021, Woods’ net worth is estimated at $800 million, Jordan’s at $1.6 billion.

Tempting to wag your finger at Woods while explaining the importance of a good college education. Both Jordan and Woods made some savvy economic decisions over their respective careers, and made millions selling footwear, golf accessories, sports drinks, and hamburgers. However, these anomalous examples may one day become more commonplace in the context of tomorrow’s college athletics, especially given the Name, Image, and Likeness (NIL) transformative rule the NCAA issued on July 1 of this year

Most people likely stop to think about how much we could earn before choosing a major in college, or when simply accepting any job upon graduation. Why do we think differently about college student-athletes who may choose a career in sports? Probabilities are one reason. The NCAA gives 1.6% odds that an athlete will graduate from the ranks of college football player to NFL player. The sport with the highest chances of stepping up to the professional ranks, baseball, still offers over a 90% chance you won’t make the cut to the Majors. Most people likely believe college athletes would be wise to develop a backup plan.

Dr. Clay Stoldt, Interim Dean for the College of Applied Studies at Wichita State University, believes that NIL is a compromise between keeping campus athletics at amateur status and accepting the reality that student-athletes are entertainment commodities in a multi-billion dollar industry.

“NIL clearly represents a major change in the college athletics landscape,” Stoldt said. “It is not, however, the end of amateurism as institutions are still prohibited from compensating student-athletes, and NIL deals cannot be linked to a student-athlete competing for a particular institution or attaining performance benchmarks.”

Former Friends football defensive coordinator and Iowa University javelin thrower Matt Byers flashed a wry smile upon hearing the term “amateurism” when linked to NIL policy.

“It’s not,” Byers said. “When you look at the elite schools, when you talk about Ohio State, Alabama, Texas, Oklahoma, the rich are going to get richer, they have the boosters. They all have a person in charge of NIL, the players’ endorsements, almost like an agent, to make sure they are within (the rules of) compliance. At the end of the day, when you have players making a million dollars, that’s not amateurism.”

 “Players are following the money,” Byers continued, “but you’re going to go down a slippery slope, they need to maintain the integrity of the game. Alabama’s quarterback has a million dollars before he even played a down . . . how’s that going to affect the locker room?“

Both Stoldt and Byers agree that most players will avoid the potential conflicts between the financial haves and have nots.

“The potential exists, but it’s not a given this will occur on a widespread basis,” Stoldt said. “The vast majority of NIL deals are modest with a median under $100. Most student-athletes are either not pursuing or are not receiving NIL deals. But there are certainly some high-earners who are the exceptions.”

Stoldt did see an advantage to team participation in NIL opportunities. “One way locker-room impact can be mitigated is via group deals, where numerous team members share in the revenue.”

Matt Byers’ NCAA qualifying Javelin throw in 2012. Photo Courtesy of Matt Byers

Byers attempted to place himself in the locker room, a former Big Ten Champion at Iowa. “I think players will be supportive, but it comes down to how the athlete handles it because if a player wants to act like he’s better than everyone else, above everyone else, then that’s when you see the locker room suffer.”

One example Byers cited is All-American Defensive Tackle from Georgia, Jordan Davis, who turned down NIL money to avoid the potential distraction from his focus on winning football games. Davis did succumb to the temptation in October, however, when he signed a contract to endorse Gorilla Glue.

Animosity can also arise between various athletes within a university, Byers said. “As a football player, when you do get paid more money than athletes in other sports, you get a target on your back. You may be a good athlete in a nonrevenue-drawing sport, and you may resent that. I received a .75 scholarship at the University of Iowa so my parents had to help me pay the rest of the costs.”

Byers doesn’t like the depiction of a full-ride scholarship athlete as not being paid. “You’re not paying for tuition, you’re not paying for housing, you’re not paying for books, you’re not paying for meals, be humble in that perspective.”

At WSU, Stoldt is helping build a new undergraduate certificate in Sport Leadership and Branding. The 15-credit certificate launches in the spring semester.  “It certainly allows student-athletes to leverage their brands to generate short-term revenue, even if that’s modest dollars for something like a camp appearance. But the greater opportunity for the majority of student-athletes comes from the ability to build brands that have long-term value. Jeremy Darlow is a sport branding consultant who is doing a lot of work in the NIL space, and he emphasizes to student-athletes that this is about the next 40 years, not just the next four. I love that line because if we really want to maximize our impact with student-athletes, we need to give them the tools to build a lifetime of success.”

Across the nation, conference realignment is happening at breakneck speed, and that, combined with the transfer portal, which allows a college athlete to change schools once during a college career without losing eligibility, is leading to fewer players staying four years at the same university. Quinn Ewers represents the complex nature of the NIL changes in the age of the transfer portal. He was signed this year as a freshman quarterback for Ohio State, and separately signing up for over a million dollars in commercial product endorsements. After accumulating only a few snaps as a Buckeye, however, he recently decided to enter the portal to transfer to a school with the chance to show his skills, something he was not going to do anytime soon at Ohio State, given the impressive performance of current quarterback C.J. Stroud.

“So many things are happening so quickly, it’s impossible to know exactly what this will look like 2-3 years down the line,” Stoldt said. “Whatever the new structures, it’s fair to expect that the most high-profile football institutions and their conferences will significantly increase their revenue. It’s more difficult to project what that will mean for other conferences and their member institutions. Live sports continue to have tremendous value to multimedia rights partners, so there is reason for optimism regarding their future revenue too. But it seems clear the gap between the richest programs and everyone else will widen significantly.”

As for Byers, when asked what would have been different for him during his track and field days at Iowa had NIL rules existed: “I would have tried to get a chance for a commercial so I could get some cash or discounts on athletic gear. It would have helped, being in a non-revenue sport. Why not get some compensation for your work?”

 
Steve Witherspoon
Buyer’s Recourse
 

Illustration by Thuan Pham

Legal Aid to the Rescue

In the course of our daily lives, we rapidly make hundreds of decisions, sometimes with well-researched information, but too often with the dubious convergence of knowledge, intuition, and experience. Various media blare the siren’s song, and we reach for the plastic, electronically transfer our funds, then eagerly await arrival of the delivery van which rests on our porch a box filled with household gadgets, or food items for the pantry.

Other decisions are more deeply impactful. Human relationships, contracting for a place to live, or trusting agents of hope who guide people through the perils of addiction, homelessness, or the not-so-simple process of aging can lead to wonderful stories of affirmation in the human spirit, or a deep-seated distrust when outcomes are less than expected, or promised.

Imagine a trip to a pet store to purchase a fancy puppy, digging into your wallet for over a grand, then taking her to the vet, only to find out she has a terminal illness. Did the seller know this in advance? Does saving the receipt matter? 

What if you pay your rent each month, but when it rains, the water collects in the globe of your light fixture, and drips onto your mattress, which can only be positioned one direction, given the dimensionally-challenged bedroom, and your landlord never returns your calls? 

Ever faced an abusive partner who threatens physical, verbal, or financial retribution if you seek to end the relationship?

If you don’t have much money, who can you turn to that knows how to approach those who’ve ignored responsibility, or culpability, regarding your dilemma? 

One possibility is Kansas Legal Services, a non-profit law firm with 11 regional offices around the state that collectively handles over 20,000 cases each year, with family services dominating the types of aid provided. 

Steve Minson is one of several attorneys at the Wichita office of KLS, and he deals with many local area consumer issues, often successfully, by reminding businesses of the Kansas Consumer Protection Act. Though remindful of why law is a challenging occupation, the lengthy statute is filled with specific examples of events and actions that lack good faith by one or more participants, and it packs a punch in terms of addressing the various types of remedies that keep both law enforcement and the judicial system forever busy issuing fines or cease and desist orders. 

“Many issues are settled after a letter from an attorney pointing out which part of the Kansas Consumer Protection Act is being violated,” Minson said. “That often motivates a retailer to respond favorably to a consumer’s complaint.

“Kansas Legal Services assists low-income and elderly Kansans. We regularly receive requests for assistance relating to debt collection lawsuits and garnishments. Businesses retain counsel to recover relatively small debts. For a variety of reasons, including lack of resources to retain counsel, many low-income defendants do not appear in court in response to a debt collection lawsuit. A default judgment results. Judgments in Kansas generally remain ‘live’ for five years but can be extended, with post-judgment interest accruing. 

“This leads to people facing crippling wage or bank garnishments many years later. Sometimes, bankruptcy is the result. If defendants in debt collection lawsuits contact us before judgment is entered, we sometimes are able to provide a defense. But providing meaningful assistance after judgment is entered and garnishment has begun is much more difficult.” 

Minson provided two specific examples that demonstrate the need to address not only buyer’s remorse, but also landlord’s neglect: “In one case, a woman came to us after being sued by a pet store for $1,000 after she had financed the purchase of a puppy. The puppy became sick right after she took it home. A veterinarian diagnosed the puppy as having a terminal congenital heart defect. The store refused to take the puppy back, and the woman then refused to pay for it. The puppy died a couple of months later. Three years after the purchase, the pet store sued her to collect the debt. Because she came to us before judgment was entered, KLS was able to defend her in the lawsuit, and we also asserted Kansas Consumer Protection Act counterclaims. The result was a settlement in favor of the woman for $3,000. 

“We also have many low-income applicants seeking help with landlord-tenant disputes.  In one case, a disabled senior citizen came to us after his landlord refused to remedy a leaking ceiling. Every time it rained, water leaked into his bedroom light fixture and then spilled over onto his bed. After an initial repair attempt failed, the landlord simply quit responding to the tenant’s request for repairs. The landlord also rejected his request to relocate to another apartment in the same complex. Water ruined the senior's bed and pillows. The leaks also caused the apartment to be moldy and make the senior ill.  We sued the landlord. After a bench trial, the Court awarded the senior $4,600 in damages for rent abatement, money to pay for a new bed, and punitive damages.”


Validation via Vetting 

Have you renewed that car warranty yet? Can you please provide your Social Security number to us so that we can make sure your stimulus check arrives within the week? We Nigerian Princes simply need your bank account number so we can ship some gold coins out of our country to a buyer. Will you help pay for the cost? You will receive 10% of the profits from the sale!

Though tempting to assume that consumer protection agencies address these egregious phishing attacks all day long, at the Better Business Bureau’s Wichita office, Kansas State Director Denise Groene assures us that she and nine other employees spend a significantly bigger chunk of time vetting businesses to determine whether they are legitimate. The scrutinizing buyer wants to know: Does a business follow through with contracted work? Does the entity have any prior issues with consumers? Is the company financially solvent?

“We have 60 employees for our region, which includes Kansas, Nebraska, South Dakota, and Southwestern Iowa,” Groene explained. “We pool resources among the four regional providers, and vetting businesses is the main function for most of our employees.

“If you see the BBB logo on a company’s advertisement, that should mean something,” Groene continued. “We also spend a great deal of time and energy looking over advertisements to make sure businesses aren’t misleading the public by pretending they have our endorsement. Some of the 213 logo violations we’ve recently uncovered were companies that had numerous consumer complaints, even criminal activity. We had a locksmith who was breaking into vehicles, so we do have to monitor who’s using our logo.”

Phishing scammers are getting more creative, according to Groene, even to the point of accessing information from social media, and internal emails to concoct stories that sound very convincing. In one case, an employee was asked to transfer money to a company executive who was out of town on a business trip, and the email contained other information that should otherwise only be internally known.

“The attempt failed,” Groene said, “but it is a wakeup call to understand that scammers are becoming more sophisticated, creating authentic looking fake websites, and even sending texts to people who thought their cell number was private.”

Groene also pointed out that organizations are preemptively mandating online scamming classes to minimize damage, or forcing employees to complete a training class as a punitive measure for making a mistake that does harm to the company. “Given the huge number of emails we receive a day, it’s easy to just ‘click, click, click’ and then you have to take training,” she said.

Another perspective to understand, Groene points out, is that scamming is a job for some people, it’s how they make a living, so they pay attention to what’s going on in the news. “After a hurricane, for example, we see a rise in ‘GoFundMe’ and other charitable sites.” Many of them are fabricated to steal your money, playing upon your good intentions.

Other typical scams include pandemic sites offering fake vaccine passports, quicker delivery of various government assistance checks, and various identity theft ruses.

How can we protect ourselves from business malfeasance, from online, pajama-wearing basement scammers?

Groene advocates deep breaths to deflect the high pressure techniques that often accompany scams, demand time to consider an offer, and then apply an abundance of common sense.

“Conduct your own research, and see if the Better Business Bureau has vetted that company.” As for online scammers, she agrees with other cyber crime experts: don’t click on any document you don’t trust, and don’t give out your credit card information to anyone you didn’t solicit. The FTC also provides words of wisdom to avoid the embarrassment and financial loss from digital pirates.

Overall, Groene has faith in the integrity of the companies who work with the BBB. “We are a 501c(6) organization funded by businesses who want to establish trust with consumers,” she said. “I do believe businesses are compliant and want to do the right thing,” Groene concluded of the consumer complaint process. “Most companies respond to consumer problems, and around 80% make that good faith effort to resolve a customer dispute, that’s all we’re asking for.” She said that her agency even occasionally receives a “thank you” card from targeted businesses because they see the BBB as an ally in maintaining consumer faith.

 
Employment for All
 

Envision Measured Progress

The Miracle Worker is a 1962 movie addressing the struggles of a blind tutor hired to help a blind and deaf girl who has vanquished the patience of her parents, a mother and father who want their child to be able to communicate with them, and to eventually live as normally as she can, given gigantic obstacles. Through tough love, and tremendous perseverance, the tutor gains the trust, and submission to instruction, necessary for her student to achieve meaningful progress.

One word you probably won’t hear from the pragmatic, determined workers at Wichita’s Envision is “miracle.” From the specialized activities and technology found in the Child Development Center (see Teresa Houston’s story in Distinguished Among Us), to the manufacturing facility, and in the research institute, a measured approach rules the day. A case in point is the progress realized at the Envision Research Institute.

“We don’t tell our financial supporters and clients that we’re trying to cure the disease,” said Research Institute Director Ron Schuchard. “We want our visually impaired clients to be able to live their best lives, to improve accessibility, to improve their vision, and to be able to get a job. When the visually impaired can’t get a job, it can lead to isolation, depression, and even substance abuse.”

A team of ten employees strive to improve day-to-day functioning for Envision’s clients, and beyond, Schuchard said, helping with specific product testing, whether for center, peripheral, or full visual acuity impairment. By testing and improving devices targeted to retinal prosthetics, electrical stimulation of the visual cortex, or driving accessibility, Schuchard believes Envision’s research is unique.

“Stanford receives tens of millions of dollars to try to cure vision loss, but they don’t spend as much time testing the products like we do,” Schuchard said. He doesn’t believe cures are promised, whether it’s Stanford, or Envision’s Research Institute. Gains are usually incremental, and not all products are deemed worth testing.

“You can’t say that a product will be on the market in 5 or 10 years, we do engage in very focused projects, but the likelihood of success for a product is less than 10% to make it to the marketplace.”

One example Schuchard gave was a retinal prosthetic he helped test. It worked, the FDA approved it, but many customers wanted even stronger performance, and determined it wasn’t worth the cost, nor the maintenance.

That challenge, however, is part of what motivates Schuchard, and the Institute’s Research Program Manager, Jared Reyes. What do they believe the Envision Research Institute can accomplish over the next ten years?

“We need to focus on our program, to provide proof that our services actually help those who are visually impaired,” Reyes said.

Schuchard agrees, and believes Envision will attract more attention during the next decade.

“We’d love to expand and make Wichita a destination for both researchers and companies to test products.”


The Quick Reference Guide for Parents With Disabilities on Starting a Business

Ed Carter has worked with clients of all ages, backgrounds and incomes. About ten years into his career, he saw a need for financial planners who specialize in helping individuals and families living with disabilities.

Conventional employment can be challenging when you’re differently-abled. Discrimination is unfortunately common, and your talents often go unrecognized. Why not choose to be your own boss instead? Starting a business with chronic pain, limited mobility, autism, and other conditions won’t be easy, but it’s very possible – and rewarding.

Moreover, help is at hand and you’re never alone. Sedgwick County offers its 9.8% population with disabilities several useful services. And organizations like Ketch in Wichita support you in developing your diverse abilities.  

Here’s a practical take on starting a business when you’re disabled while still taking care of your parental obligations: 

Develop your idea

To have a successful business, you need a good business idea. It doesn’t have to be particularly ambitious or unique. Something practical, in-demand, and in line with your interests and skills is better. You can start small, for example, and be a solopreneur and later hire people as your business grows. JAN offers several excellent business suggestions specifically for people with disabilities. Brainstorm at least a couple of ideas before moving ahead.   

Do some market research

Next, it’s time to see if your idea is workable. Some questions to ask yourself are whether customers would be interested in what you’re offering, whether the market is saturated already, and how much you’d be able to charge for it. For inspiration, help, and support, talk to entrepreneurs, browse forums, and look at other similar businesses online.

Write a business plan

When an idea seems feasible, it’s time to structure it with a business plan. As the PennState Extension says, your business plan is your roadmap for the future. It can be time-consuming and difficult to create, but doing so will allow you to organize your thoughts, see the big-picture view, and avoid missing out on important details.  

Make financial arrangements

Now that you have an initial blueprint ready, you will need to gather up some seed money for your venture. Adequate working capital is critical for the smooth functioning of your business – you’ll need to pay for overheads and miscellaneous business expenses. If you don’t wish to use your savings or turn to friends and family, there are still multiple funding avenues open to you:

●        Grants: The federal government offers grants you don’t need to pay back if you have disabilities. Private organizations and corporations also offer grants.  

●        Loans:  You can get loans from various sources, from the state government and non-profits to private lenders and banks. Loan amounts can range from $300 to over $250,000. 

Dot your legal I’s

Starting a business involves a ton of paperwork. For example, you will need to choose an appropriate business structure, set up taxes and payroll, and sign contracts and leases. You will also need to get an EIN (aka TAX ID Number) assigned to identify your business. It’s how the IRS tracks payroll-related taxes. Your EIN allows you to file state and federal taxes smoothly, whether annually or quarterly. You can raise an IRS EIN request for your unique number. 

Get your kids on board

Your kids, if they’re of suitable age, should be aware of your new venture. Prepping them, informing them of the importance of your business, and setting up some ground rules beforehand can help you avoid headaches later. Further, it’s a good idea to set up a routine. That way, you’d be able to devote enough time to both your business and kids.

Arrange childcare and related help

Of course, kids can be a handful and you won’t always be able to look after them yourself. When it’s all overwhelming, you can always arrange childcare or ask your family and friends to lend a hand during business hours. There are other resources you can turn to for help with your children.

Launch and promote

Once the groundwork is laid and your business is registered, you’re ready to launch. Launching is a mix of setting up shop and marketing yourself. You should get a business site and put your offerings online. Create a launch event and involve your community in the whole endeavor. The launch is a big deal – put some thought and effort into it.      

Business success is all about long-term planning, effort, and tenacity. You will need to face your fears, accept risk, and be bedfellows with uncertainty. Your disabilities could make it extra hard. It can take time to develop a suitable mindset, so be kind to yourself. Take inspiration from successful people and keep moving forward. Believe in yourself and success will follow.

 

Steve Witherspoon
Time to Stop Digging?
 
Illustration by Thuan Pham

Illustration by Thuan Pham

When the first Secretary of the Treasury Alexander Hamilton asked this nascent nation to accept over $74 million in debt, about a third of it based on state expenditures tied to the Revolutionary War, both federal and state officials complained it would doom the United States before it could take its first steps. Hamilton replied that a nation is not legitimate unless it can pay what it owes to bondholders, domestic and foreign; in the eyes of powerful countries, it will not be creditworthy. He also surmised that linking the national debt to the collective states’ responsibilities would financially unite the diverse 13 former British colonies into a united group of patriotic supporters.

Hamilton was so adept at brokering deals among the elite that he convinced enough of the leaders of Pennsylvania, New York, and Virginia to agree to the assumption of debt, at par value, if the states would agree to move the U.S. Capitol, and the inherent power within, to the District of Columbia, at the border of Virginia and Maryland. This Compromise of 1790 become one of the lesser known, yet very critical foundations of the nation moving forward, especially one bound and determined to battle unrepresentative taxation, and excessive Executive power.

Today, given that some project the U.S. debt to soon reach $33 trillion if Congress passes both the infrastructure and budget reconciliation bills, we ask the Battling Bobs, Mr. Litan and Mr. Love, to answer this pertinent question:  What is an acceptable amount of debt the U.S. should carry? Some traditional economists believe that debt-to-GDP ratios are critical to determining that amount, others point to what a nation can afford in terms of servicing the debt. Some modern economists are beginning to question whether governmental austerity in times of bulging deficits and questionable economies is the right approach. In a Keynesian mindset, perhaps investing in the economy is always the right thing to do, debt levels be damned. Always ominously lingering:  rampantly rising interest and inflation rates, which have toppled economies, and governments, alike.

When is it time to spend, and when is it time to stop digging that financial hole, drilling the country into deeper vulnerability? Read and learn from two economists who have spent decades contemplating this very issue.

How Much Debt Is Too Much?

Robert Litan

 I don’t know the answer to this question, nor really does anyone else. But that doesn’t mean I don’t worry about rising federal debt. 

I have been a “deficit hawk” through much of my professional economic life, like all my colleagues at Brookings -- except when the government is called on to pay for true national emergencies like wars and natural disasters, like the (continuing) COVID pandemic. But it’s not the amount of debt per se that we have been worried about, but the amount of debt in relation to our gross domestic product, which roughly measures our ability to service the debt. 

The conventional concern always has been that as the debt-to-GDP ratio rises, then controlling for all other variables, it will cost the government, namely we taxpayers, if not now then eventually, more to borrow. Put another way, rising debt-to-GDP, again holding all other factors constant, should go hand in hand with higher interest rates. As interest rates rise, that makes it more expensive not only for the government to borrow, but for consumers and businesses, too. New equipment in manufacturing and in all kinds of services embodies newer technology – especially faster chips, better software, and the like – makes workers more productive, enabling faster growth in wages. Accordingly, any slowdown in investment due to higher interest rates means slower growth in wages. It is for that reason that my Brookings mentor Charlie Schultze, one of the best practical economists of his generation, frequently wrote that rising debt ratios are like “termites in the woodwork,” slowly eating away at the strength of the U.S. economy, or at the American Dream of rising wages and incomes for all. 

Others fear high and rising debt ratios for a different reason: what they portend for inflation, and in a worst case, the risks of recession they pose. The inflation fear stems from the fact that unlike state and local governments, or you and I, the federal government doesn’t face a hard borrowing constraint. Although technically the Fed can’t directly “monetize the debt” that government issues to pay for what tax revenues don’t, it can and does so indirectly by buying such debt in the secondary market. 

Throughout the past several years, especially during the pandemic, the Fed was doing, and continues to do. a lot of this through its “Quantitative Easing” (QE) program. Lately, Fed governors and Federal Reserve bank presidents have been urging the Fed to “taper” its Treasury bond purchases because of the recent spike in the inflation rate. But Fed Chairman Powell (who awaits reappointment as chair, and may get it by the time this piece is published) has argued that, I believe mostly correctly, the surge in inflation is largely temporary, given the bottlenecks in the economy caused by the pandemic. Once the delta variant wanes (which admittedly may take some time), these bottlenecks will ease, more firms will be able to ramp up production of items in short supply, and inflation rates will head back down.

I am well aware that there are those who still nonetheless adhere to “monetarism,” defined by Milton Friedman’s famous dictum that "Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output." But this statement only holds true if the “velocity” of money – or the rate at which it turns over -- stays constant. At least since the mid-1990s this has not been the case, as shown in the second chart compiled by the Federal Reserve Bank of St. Louis: https://avenueinvestment.com/insights/a-case-study-on-inflation-vs-the-velocity-of-money/. Declining velocity has essentially offset the rising money supply, keeping inflation contained – until the recent pandemic-related supply constraints, which have nothing to do with monetary policy. 

Likewise, long-term interest rates have been falling over the past two decades despite high and rising debt ratios, which seem to directly contradict the economic conventional wisdom recited earlier. But remember the qualification I also stated: Only when all other factors are controlled for will rising debt ratios lead to higher interest rates. In fact, over roughly the past two decades, those “other factors” include things like rising savings rates around the world and declining profit rates, which have combined to increase the demand for government debt, pushing up its price, thereby lowering interest rates (which vary inversely with debt prices, since rates are calculated as the ratio of fixed interest payments divided by the price of debt). 

All of this – relatively stable inflation, until its recent spike, and falling interest rates -- has led some economists and politicians to embrace a new economic theory, labeled “modern monetary theory.” MMT essentially says governments don’t have to worry about deficit financing at all – unless and until deficits cause inflation. That will happen when they lead to so much money creation that the additional money swamps declining velocity and makes Friedman’s famous aphorism about inflation come true. 

MMT has a major flaw. It assumes government policymakers – not the Fed and its control over monetary policy, but Congress and the President who jointly control fiscal policy (government spending and taxes) – can and will respond to high and rising inflation by raising taxes and/or cutting spending. For anyone who has been awake over the past decade or more, they know the unrealism of that assumption. The federal government is essentially dysfunctional, especially as to macroeconomic management, largely because the country is so politically polarized. To count on Congress and President to bail us out from an inflationary spiral, should one take root, is fantasy. 

That’s why we have a Federal Reserve, which although not totally immune from politics, still at least tries to adhere to its twin statutory objectives of maintaining price stability (which the Fed has recently redefined as inflation at 2% per year averaged over some period of time) and maximum employment. Unlike Congress and the President, the Fed has more calibrated tools at its disposal – setting interest rates on the reserves that private banks hold at the Fed (an increasingly favored tool), and essentially doing the same thing for short-term government debt by buying and selling government securities. However, the Fed has a big problem when it wants to fight inflation – by cutting back on the growth of the money supply (via debt purchases) and hence allowing interest rates to rise (as Paul Volcker did in the early 1980s). With few exceptions, Fed tightening almost always has caused the economy to fall back into recession. 

But back to the question posed by the title: how much debt is too much, or more precisely, what ratio of government debt to GDP is too high? A decade ago, two well-known economists, Carmen Reinhardt (currently the chief economist at the World Bank) and Ken Rogoff (a professor of economics at Harvard) confidently wrote in their best-selling book at the time, This Time is Different (Princeton Press, 2011) that, after examining two hundred years of history across countries around the world, crossing a government debt-to-GDP ratio of 90 percent spells big trouble. The US government blew past that ratio around the time of their book and is now approaching 130 percent (see https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287) -- and yet we have no financial crisis since then, other than the pandemic-induced economic crisis that has since eased (though because of delta we’re not out of the woods). Japan’s debt-to-GDP ratio hovered at 200% during the past decade, and since the pandemic has risen to 224 percent (https://www.ceicdata.com/en/indicator/japan/government-debt--of-nominal-gdp), and no financial crisis has gripped that country either. 

Can we take comfort in these facts? Yes and No. Another famous statement by another (late) economist Herb Stein reminds us why: “If something cannot go on forever, it will stop.” Applied to the rising debt-to-GDP ratio, all we can say with any confidence is that as long as this continues, the risk of inflation getting out of control also increases, which also makes recession-inducing inflation fighting more frequent. That, in turn, lowers the long run growth of national income and personal wages, and makes both more volatile. 

It used to be the case that politicians in both parties were more worried about this risk and acted accordingly. Annual government deficits hovered in the 2-3% of GDP range (don’t confuse annual deficits with the total stock or amount of federal debt). But those days seem like ancient history today. Republicans didn’t care much about increased debt triggered by the tax cuts of 1980 under Reagan, 2001 and 2003 under Bush 43, and 2017 under Trump. With some exceptions, Democrats today don’t worry much, or at all, about even higher deficits (as shares of GDP) caused by increased spending (not fully offset by likely tax increases).

Given everything else that has been happening lately, this should not be all that surprising. After all, if we collectively responded to future risks, we would have handled the pandemic, and now increased intense weather events triggered by continuing climate change, far better that we have. With debt, the same (non) response seems just as likely.            

 Robert Litan, a Wichita native now living in Lawrence, Kansas, is an economist with the Brookings Institution and a law partner at Korein Tillery in St. Louis and Chicago. His latest book is Resolved: Debate can Revolutionize Education and Help Save our Democracy (Brookings Press, 2020). You can find his regular blog posts (and subscribe) at roberlitan.substack.com. 

 

Debt Limits are a Ponzi Scheme

Bob Love

"No amount of REAL DEBT is unreasonable and no amount of FIAT DEBT is reasonable."  [This is my paraphrase of David Hume's "If all our present taxes be mortgaged, must we not invent new ones? and may not this matter be carried to a length that is ruinous and destructive?" Political Discourses, Of Public Credit 1752

The point is that our current debt escalation cannot be stopped ... it has become a Ponzi scheme of epic proportions.

·  REAL DEBT is a contractual obligation that arises from REAL SAVINGS ... which arise from a REAL SURPLUS of REAL PRODUCTION in excess of REAL CONSUMPTION. REAL DEBT allows for but does not require MONEY ... it is REAL and reality has limits.

·  FIAT DEBT arises from FIAT $AVING$ [ie. Federal Reserve Bank Notes] ... which are detached from any reality. FIAT DEBT requires FIAT MONEY ... because it is not REAL. FIAT DEBT becomes FIAT MONEY ... and because it is not real, it has no limits.

As long as the US$ was redeemable in something REAL ... which it was until 1971 ... there was a "limit" on DEBT. After 1971, there was NO LIMIT ON ANY DEBT other than the practical implications of any Ponzi scheme. The ramifications are mind-boggling, but we see them unfolding everywhere as debt is massively translated from private to public in a scheme that dwarfs all history:

·  people are ecstatically paying off credit cards with stimulus funds

·  renters are ecstatically paying rent with stimulus funds

·  employers are ecstatically making payroll with stimulus funds

·  ... ad infinitum.

Ponzi schemes are by definition unstoppable ... and there is NO LIMIT possible on FIAT DEBT once it begins to accumulate ... it will and must grow until the scheme collapses.

 

Tony Davies presented a "domino" analogy in a recent AIER article that is a helpful way of looking at what is facing us. He even "integrated" the dominoes showing us that all our various "policies" [which we like to manipulate as if they are separate] are really "organically" connected to one another. I think Tony answers your question, but not in the way you expected, when he concludes:

"Politicians eventually borrowed so much that the Fed’s monetary policy became a servant to politicians’ fiscal policy. All of this ends with significant and sustained inflation. The sequence of falling dominoes is too far along to stop."

 

I would disagree slightly with Tony in that I believe the Fed is the master, not the servant, of the politicians in an "inverted totalitarianism" ... but this totalitarianism is Hayek's serfdom nonetheless. The MMT domino has fallen and the powers behind the FED will, I think, soon outlaw all commerce conducted without using their "currency" [in an attempt to crush Gresham's Law by outlawing "good money"]. But I do agree with Tony that it is too late to avoid collapsing into this abyss, so maybe this is a distinction without a difference.

Also visit this link to dig deeper: Fiat Credit = Debt Delusion

 
Steve Witherspoon
Preemptive and Restorative Justice
 
Illustration: Thuan Pham

Illustration by Thuan Pham

Crime and Punishment: A work in progress

What is the purpose of convicting a person of a crime against society? Vengeance? Restitution? Time out for the perpetrator to think about what harm was brought upon the victims, to comprehend what it means to lose the freedom to roam the earth as that person pleases? What guarantees do the people of a community have when the penal system releases that person into the population at large that more crimes aren’t forthcoming? What is just, and who dissects the seriousness of the offense, and the psychological makeup of the offender, to determine whether that individual serves the maximum punishment in a jurisdictional facility, or whether he or she winds up on parole?

Maybe, given the heinous nature of some crimes committed, a bigger question arises: What can we as concerned citizens do to engage, redirect, or rehabilitate those who, based on predictive data, are likely to violate laws in the future?

Those are several of the questions frequently facing Marc Bennett, Sedgwick County District Attorney, and he must daily make the decision to prosecute, divert, or dismiss those arrested and jailed, based on how it impacts the community, and how it improves the lives of those who break the law. Though fully understanding why people commit crimes isn’t an exact science, Bennett, in his 24th year in the District Attorney’s office, his ninth as DA, sees a few patterns of criminal behavior that are clear, and advocates for more community resources to ease the number and severity of crimes, which he deems critical to a safer Sedgwick County citizenry.

Sedgwick County District Attorney Marc Bennett

Sedgwick County District Attorney Marc Bennett

“I don’t want to speak as a criminal scientist, but four factors go beyond correlation, and present a rather strong suggestion of causation,” Bennett said, listing drug use, mental health issues, domestic violence, and the ubiquitous availability of guns as driving forces behind the crime rates in Sedgwick County, which tallies significantly more crimes across the board than the other 104 counties in the state.

Some notable statistics to consider from the Kansas Crime Index 2020: Kansas’ murder rate was 43% above the 10-year average in 2020, with 61 of the state’s 193 homicides committed in Sedgwick County, an increase of 48.5% from 2019. Bennett said that the Wichita Police Department worked 59 homicides in 2020 and cleared 45 of 59 for a 76.27% clearance rate. According to The Wall Street Journal, 10 of the U.S.’s largest police departments cleared 59% of homicides last year, though Covid-19 likely played a role in reduced investigative voracity. Johnson County’s 9 murders were the second highest number in Kansas. Property crimes comprise 84% of state totals, violent crimes the other 16%. Bennett believes the four factors play a defining role in both violent and property crimes.

“The pandemic has heightened the rise of methamphetamine use and domestic violence across the state,” Bennett said, “but these were issues for many years, and people are turning to drugs to deal with depression, unemployment, and being cooped up in their homes.”

As for domestic violence, Bennett has observed this pattern while researching a case, “As I read the details of a previous domestic violence incident, I’ll see the name of a current offender who was listed as a child in the prior case, who then turns to violence as an adult.” Bennett said that anger explodes in an offender for various reasons, including money issues, unemployment, sex, and drug or alcohol use. “These are triggers for people who are otherwise simply at home with the people they love, and then violence erupts.”

Bennett said that he’s not making a political statement, but is concerned about the rise in volume of firearms in Sedgwick County. “The ubiquitous nature of firearms has become a major concern for law enforcement. Over the past twelve years, we’ve seen the number of guns on the street double.” Bennett said that his office, and the Wichita Police Department, have emphasized the need for gun owners to secure their weapons. “We have seen so many guns stolen from vehicles, and they often wind up linked to criminal activities.”

With all of that to battle, what can be done to ease the pain and suffering produced by criminal activity? How do we reduce recidivism, given that a small percentage of people commit a majority of the crimes? Bennett promotes solutions to crime as a member of the board of directors of the Exploited and Missing Child Unit (EMCU); the Mental Health and Substance Abuse Coalition; the Wichita Area Sexual Assault Center (WASAC); and the National District Attorneys Association. He is a former president of the Kansas County and District Attorneys Association and was named Kansas Prosecutor of the Year by that organization in 2018. He is a former board member of the Sedgwick County Child Advocacy Center. He is an appointee to the Kansas Prosecutor’s Grievance and Ethics Committee. In addition to these biographical accomplishments, Bennett composed a letter to Kansas state legislators in 2019, requesting criminal justice reform. In the letter, Bennett points out the “revolving door” incarceration issues the state faces as parolees violate the terms of their court order, then serve more time, only to be released and commit more crimes. Many of the recidivists are caught with drugs, or can’t control negative behaviors due to mental illness. Bennett wrote:

“In Sedgwick County, COMCARE (the Sedgwick County licensed community mental health center) anticipated saving $4 million after it opened its expanded Community Crisis Center in 2015 to provide additional services not previously provided, including sobering beds and a 23 hour crisis intervention unit.38 The program served 5,799 people in 2018 at an annual cost of approximately $1.3 million in state funds. The Wichita State University Hugo Wall School of Public Affairs has assessed the program each year since the Center’s opening and found savings to the community of more than $8.1 million annually through 201739 with estimated savings from 2018 approaching $12 million.”

Since the average cost for one year of incarceration for one prisoner equaled around $24,500 in 2019, Bennett argued that drug and mental health treatment might end up saving the state, and Sedgwick County, large amounts of money while providing those on the wrong side of the law the opportunity to improve their quality of life outside of prison cells.

“If we can focus on the 500-600 people most at risk in this county, then that will provide tremendous positive impact on our community,” Bennett said. “We need more beds for our mental health facilities, we need more people working at COMCARE, they’re down 200 people right now. Where do you turn to to get help for your kid when they’re in crisis?”

 
Unresolved Covid Questions, WSU's MDL is Researching Answers
 
Sara Nickel (Photo courtesy of Wichita State University Molecular Diagnostics Laboratory)

Sara Nickel (Photo courtesy of Wichita State University Molecular Diagnostics Laboratory)

Unmasking the testing process

Now playing in the world’s various echo chambers: Mask on, mask off, mask on . . . vaccinated? Why? Why not? Do I need a vaccine passport to enter? What do you mean I need a third shot this fall? What is a variant?

In the world of viral epidemiology, it seems reasonable to expect these questions. Covid-19 is certainly not the world’s first pandemic, yet it is presenting unique challenges. It is questionable, however, to expect quick, decisive answers. To be definitively determined: What are the pathways, contacts, and methods of transmission of a particular virus, and which interventions will stem the tide of pandemic spread? Many years of charting human responses to a virus, and its subsequent vaccine, are required to pinpoint those answers, but our impatience with severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), and its nasty offspring, the Delta variant, have accelerated expectations. Tired of playing Fauci Says, or wondering if you’re an existential threat to all around you? Perhaps local experts can provide clarity.

Sarah Nickel, and the staff at Wichita State University’s Molecular Diagnostic Lab (MLD), are providing genomic sequencing expertise to the Covid-19 process which will allow results to accurately reflect viral load, and whether you are likely at the beginning, or the end, of the illness; are you in need of simple social distancing and masking, or are you a Covid Mary who needs to isolate until the load safely decreases?

Nickel, a Medical Laboratory Specialist, who is the Technical Director of WSU’s MDL, and an Assistant Professor, Medical Laboratory Sciences at WSU, believes that testing has, and will continue to have, a major impact in the Wichita Area, and worldwide, as efforts to minimize the devastating effect of the Covid pandemic. Planning, building, and establishing the process for operations proved a daunting task, with many naysayers and roadblocks along the way.  

Given that many virologists are labeling Covid-19 perennial, and that Delta variant numbers are rising while testing numbers are down from previous months, what do you expect testing participation to be from your Community Partners, and others, this fall, and beyond?

I feel like this past year has been nothing but unpredictable for me. Based on all 15 years I have worked in clinical virology, I thought Influenza A was going to be terrible and we never saw it, but I am always happy to share my thoughts. Testing numbers have been decreasing greatly over the summer, but as of this last few weeks, our testing numbers are now going up. We have performed more tests in July than we did in June and we still have another week of this month. Within just our lab, we have also seen our positive rate almost double since last month. The Delta variant is spreading through our community and is directly related to our increased testing and positive rate. While it is hard to completely predict, we anticipate that test orders will continue to increase into the beginning of August.  Past August, I am still completely unsure what to expect. I feel like we can plan to need to test for at least the following year and anticipate the need for testing will come in waves as new variants continue to break out. I am really worried to see how this particular virus will continue to mutate and how long this might go on in such full force. I am also worried and wondering about other viruses like Influenza this year. We are living in a very unpredictable situation. I just hope that funding will continue to empower people to test so that they can isolate and notify contacts to try and keep the spread down while we all try to live a somewhat normal life. I believe our partners will continue to lean in as needed for testing and I anticipate some could begin proactive screening again as the numbers begin to rise. We also have signed on several new partners recently, and that is something that had stalled for quite some time.

From what you've experienced, what are the major inhibitors exhibited in the Wichita Area with regard to Covid testing?

 In the Wichita area, I feel the major inhibitors to testing have really diminished over the course of the year. In the beginning it was lack of supplies, funding, and collection sites. Additionally, people needed a doctor’s order to test. I think not all people that needed a test could get an appointment and if they could, knowing that results would take so many days to come back was a huge inhibitor. With the addition of so many community testing partners and our huge expansion of the PCR testing capacity in the county, I feel now that really isn’t as big of an issue. I really feel we have eliminated large inhibitors to testing by the state funding and standing order form Dr. Norman for anyone that needs a test. Additionally, by adding saliva as an optional specimen type, we have truly been able to bring testing right to the need even in underserved populations. I do feel we are seeing less desire in the community to test, but that is gradually changing as we see more and more cases. Symptomatic people still appear to be seeking testing as appropriate which is very encouraging to me. I feel like honestly we have really overcome inhibitors to testing. Now we are just working on making sure the community knows that testing is still available free of charge. If the state no longer funds testing, I anticipate we will see great decreases in testing as the cost is so high and unaffordable for many.

What are some of your insights regarding the impact your lab has provided to this community, and what, if anything, has surprised you?

The impact in the community has beyond surpassed anything I could have predicted. We have over 500 testing partners now. Several of which are also registered with the state of Kansas to allow for collections on anyone in the community that wants to test. To be able to test and consistently get a result within 24 hours (usually less than 12) allows people to be empowered to help stop the spread or know that it is at least safe in the moment to hug their mother or grandfather. We have met our turn-around time promise over 99.5% of the time. I knew we would be able to help with testing. I really thought we would be doing it by helping already existing healthcare clinics/hospitals. What I didn’t anticipate was our ability to empower organizations to help their own employees, families, and volunteers. The endless thank you’ s we still receive truly warm my heart. Saliva testing has been huge (given the more invasive alternatives). We have provided results for over 160,000 tests since late October 2020 and if the need had been there, we could have done so many more. We had nowhere near that capacity in this county before our lab started. I was actually working PRN in the microbiology lab at a local large hospital facilitating these tests one at time and just so frustrated with the process and the methods that we were using because I knew there were better ways. The administration just didn’t have enough workforce to bring in more molecular testing that wasn’t performed easily on an instrument. Something else that has surprised me is that I have been teaching at WSU for 4 years now and I have taught over 120 MLS students, but this lab provided me an opportunity to teach in a completely different way. I never thought about my ability to impact the community by teaching those that weren’t in my field. I have led presentations, explained PCR (Polymerase Chain Reaction) to people from the governor to all types of students all on different educational paths. I have had opportunities to make known a profession to people who had never heard of medical lab scientists. Also, I just feel it solidified my belief in our university. From the beginning, the first day we began planning this lab in April of 2020, there was no way that I truly felt we could pull off something this huge in such a short amount of time, but I knew I could do the testing and others could pull off the rest. However, in a time when things were so hard and we only wanted to make things better, to see so many people fight against what we were doing was shocking. Overall, though, there is support, so much support. It just came from those out there that felt so helpless before. It came from all the small businesses and non-profits and athletic programs that were so grateful that we pushed through. No matter how many people tried to push us down, there were so many awesome powerful people at WSU to lift me and the team back up. We as people have an opportunity to support and drive each other and WSU, especially the leadership and innovation campus, have really opened my eyes to teach more than just my students and to believe in things that sound impossible. WSU partnering with the community and faculty knowledge has huge power to drive positive change. I have now taught over 15 other Medical Lab Specialists how to conduct this type of complex molecular virology testing. That increased our community’s lab knowledge in molecular infectious disease testing to larger than it has ever been. We need lab scientists that truly know how to conduct molecular testing, and this pandemic has proven that to me. I can’t wait to continue to meet this challenge and the next as we try to think outside of the healthcare box and drive more change. I wish it would be easier, but if we can do this I know we can do a lot more too!

 
Steve Witherspoon
Transformative Transactions: What's in Your Digital Wallet?
 
Illustration: Thuan Pham

Illustration by Thuan Pham

Consumers are very astute when it comes to seeking a bargain, often to the precise penny they’re willing to spend for a valued item. Some purchases require extensive bargaining, a back-and-forth process that could even involve mediation. Most daily purchases, however, are simply based on predetermined prices. Two critical questions stand out for each occurrence: 1) How much is the transaction truly worth to buyers and sellers? And, 2) What form of currency is acceptable to both parties?

In 2013, New York magazine printed a story about illegal drug sales being conducted via bottles of Tide, the ultimate money launderer. You might ask: Does the orange container of cleaning delight pass the test as valid currency? Here are some of the traits that test the detergent’s transactional legitimacy: wide acceptability (what’s in your laundry room?), portability (sort of), durability (the leading U.S. laundry detergent since 1949), consistent value (seems to stay close to the same scanned price in the grocery store), cognizability (Proctor and Gamble spent $197 million promoting Tide in 2019 alone), and stability of value (any chance children will stop playing in the mud?). No wonder street dealers stopped accepting cash.

As you read more about the emerging power of digital currencies, it’s time to decide whether they embody legitimizing characteristics that could elevate each to the “full faith and credit” status of the fiat Jacksons that flow from our ATMs. Or, at least, to a jug of Tide.

Perhaps akin to the American hesitancy to convert from the footing of our current measurement system to the ubiquitous metric system, we must probe: is there foundation underneath our unease toward digital currencies? Are they simply intangible, untrustworthy blocks of chained data that can be hacked by any Ne’er-do-well with a laptop?

Enter into the discussion the Battling Bobs, Candor’s addition to the Mount Rushmore of notable economic analysts, Robert Litan and Bob Love. Each provides insight to help clarify the murky future of digital currencies. Read both compositions, then decide if you’re in need of a different wallet.


Cryptocurrencies: A Guide, Questions, and Risks

By Robert Litan

Cryptocurrencies are privately issued currencies or assets -- the distinction is not so clear, and I will refer to them here interchangeably as “crypto” -- secured by decentralized blockchain technology, which operates through a public, though encrypted, public “ledger,” which assures anonymity, security, and privacy. Crypto has aroused much fascination, confusion, and concern, hence this essay. 

Fascination because of all the conventional money, issued by many different governments around the world, that has gone into them. The total global crypto market hovers around $1.5 trillion, a figure that wildly fluctuates from day to day, but is so large that it is highly unlikely to disappear. 

Confusion, because outside of the techies, some sophisticated investors (individual and institutional), and criminals (we’ll get to them) who buy and sell them, these new currencies are not well understood. Are they good for anything, or are they the 21st century equivalent of overpriced Dutch tulip bulbs?

Concern because cryptocurrencies, especially bitcoin, have been the currency of choice for many criminals, especially ransomware hackers who love the anonymity and security, making it exceedingly hard for law enforcement officials to find and prosecute those who use crypto to facilitate their illegal activities (there are some exceptions: the US government was able to crack and return about half of the ransom in the Colonial Pipeline ransomware attack). 

Are cryptocurrencies even currencies or money? Not quite, under the standard tripartite definition of “money” – something that is accepted as a medium of exchange (you can pay with it instead of bartering), is a store of value (you can hold onto it and know that it will be good for paying for things indefinitely into the future) and is a unit of account (it is measurable and widely used to price goods, services, and other assets). 

Let’s put the two most popular crytocurrencies or crypto-assets – Bitcoin and Ethereum – to these tests. Bitcoin is an encrypted digital currency that is “mined” by solving increasingly difficult mathematical puzzles. Because the process of transferring bitcoins is cumbersome, bitcoin is not a widely accepted medium of exchange, although recently one Latin American country, El Salvador, has accepted it alongside its national currency.  

Bitcoin is a store of value, however, so much so that it is analogized to “digital gold,” an asset that, unlike gold, requires no storage costs (aside from super-careful protection of passwords) by the holder. Indeed, because US tax authorities consider bitcoin an asset, gains or losses on its sale are taxed as capital gains. Likewise, some assets and goods are priced in bitcoins, and bitcoins themselves are divisible into fractions, which make it a unit of account. 

Ethereum also has its own currency, “Ether” or ETH, and allows transactions to be completed in seconds -- rather than minutes, as with bitcoins -- yet it, too, is still not widely accepted for transactions. As with Bitcoin, Ethereum also is a store of value and a unit of account. 

There are two big differences between the two major cryptocurrencies. One is that although both have limited transaction uses and both are stores of value, Ethereum has a broader use: as a cryptographic method for facilitating and monetizing the use of Ethereum “smart contracts,” coupled with its decentralized application (dapp) platform, using its own programming language. The other big difference is that whereas the supply of ether is unlimited, there is a fixed supply of bitcoins, ultimately 21 million. 

Why then have both cryptocurrencies increased so much in value – that is, in relation to conventional currencies like the dollar? Their slow but limited acceptance as media of exchange can’t explain the price run-ups (or the recent sharp decline). The value of Ethereum’s platform for digital contracts has been increasingly recognized, but this, too, doesn’t really explain ether’s exponential price increase (and recent fall) either. 

For a time, many thought that both currencies/assets represented safe havens against sharp increases in inflation (in the prices of a basket of goods and services). But that theory has been punctured by two events: crypto prices surged last year and early this year even as inflation remained relatively quiescent, while crypto prices sharply declined as inflation surged this spring (in my view, due largely to continuing pandemic-related bottlenecks throughout the economy, which hopefully should ease over coming months). 

So how does one explain the extraordinary rise in crypto prices? There are probably as many answers to this question as there are holders of crypto assets, not counting those who don’t own them, especially the skeptics or critics. Nonetheless, it is possible to identify some combination of the following forces that clearly have been at work: the known fixed supply, in the case of bitcoin, which gives buyers comfort that value cannot be inflated away; a libertarian mistrust of government and government-sanctioned fiat money, especially as central banks in the developing world have greatly expanded money supplies since the 2008-09 financial crisis (but which has not led to the explosive rise in inflation as monetarists predicted); and, of course, continuing demand from criminals. Initially, probably most of the demand for crypto has come from young techies, mostly male, but as crypto prices have risen, various institutional investors have dipped their toes into crypto markets, and one exchange, Coinbase, has recently gone public through an IPO. 

But even all these factors don’t explain the rising demand and prices. The only plausible explanation for this is a bubble-like narrative: once crypto prices started rising, more buyers bought in expecting further price increases and not wanting to “miss out.” To be sure, real world negative events, from time to time, have interrupted this narrative, contributing to the extraordinary volatility in crypto prices. “Downer” examples include China’s efforts at halting crypto mining and continuing ransomware attacks carried out by hackers accepting payment in crypto (because it is untraceable), which raise the specter that other governments, most importantly the U.S., may one day ban or significantly raise the cost of buying and selling crypto.

So far, however, enough investors continue to place their trust in crypto, which keeps the underlying narrative alive. Trust, after all, is the basis for the acceptance of conventional currencies, too. Rapid inflation eats away at the value of money and trust. Crypto holders believe that other people will continue to believe that crypto is just as, if not more, trustworthy than conventional currencies.

Looming on the horizon, however, is that privately issued digital currencies will soon be joined by central bank digital currencies (CBDCs). China has already run trials in several large cities of a such a system. Here in this country, the Fed is studying the issue, as is the European Central Bank. The main impetus seems to be to ensure that the currently unbanked have secure places to hold their money without the expense of using conventional banks, as well as to eliminate lags in the clearing and settlement of financial transactions both within countries and across borders. In addition, another not so widely advertised rationale for having a CBDC is to reduce criminality, since the Fed then could share digital transactions data with tax authorities and law enforcement (although theoretically the Fed could be prohibited from doing this without a valid search warrant).   

Current Fed Chair Jerome Powell has expressed caution about the Fed jumping into digital currencies, which are not the same as cryptocurrencies. Transactions using the latter are decentralized and anonymous; Fed digital money is both centralized and easily tracked. Because of this difference, even if the Fed someday issues digital currency – essentially electronic funds rather than metal coins and pare currency – it should not make much of a dent in the demand for current (and possibly new) cryptocurrencies.

In any event, it is far from clear the Fed will even issue digital currencies, for at least two reasons. One is that the Fed would have to replicate the branch and ATM network of existing commercial banks. It might enlist the post office in this effort to reduce redundancy in federal buildings, but the transition would be difficult and costly. More fundamentally, Powell and others have openly worried about the adverse impact that creating Fed retail deposit accounts would have on the commercial banking system. Specifically to what extent would those safe deposits only or primarily attract funds that are not now parked in banks, or to what extent it would siphon off deposits from commercial banks, thereby reducing available funds for loans? In principle, existing finance companies that rely on commercial paper and other wholesale funding that is not federally insured could step into the breach, but that funding is more expensive than deposits and so would lead to increased interest rates on commercial loans, an outcome that could prompt substantial resistance to the creation of official digital money.

If Fed-provided digital currency won’t dampen interest in crypto, two other risks might. 

One is that ransomware could become such a significant problem that irresistible political pressure mounts for the US and other developed country authorities to effectively ban cryptocurrencies, either directly with stiff financial and even criminal penalties for its use, or indirectly, by prohibiting any crypto exchanges from operating in the U.S., or by imposing prohibitively high taxes on crypto transactions. In the past, various experts have highlighted how difficult it would be to enforce any ban, largely because cryptocurrencies exist through software on the Internet, meaning that any prohibition would have to be coordinated among all of the major countries in the world. Up to now, the likelihood of this level of coordination has seemed far-fetched, but if ransomware attacks grow not only in number but in havoc they wreak, do not dismiss the possibility that governments will react, however clumsily, by doing the best they can to ban or severely crimp the use of crypto. If that happens, crypto prices almost certainly would plunge.  

The other risk is demographic, and time-contingent. Young techies around the world drove interest in, demand for, and thus the price increases in, crypto. What will happen as they age? Will they turn back toward more conventional assets, especially to diversify their holdings, and if so, will their demand be replaced or augmented by increased institutional interest in crypto, or by a new generation of buyers? What if new forms of cryptocurrencies, much more usable as a transaction medium are invented and widely used – thus potentially displacing the demand for currently popular crypto assets? 

No one really knows the answers to these questions. If I were a crypto holder – and I’m not – these are the questions and the risks implied by the answers that would keep me up at night. Or at least induce me to diversify.


Lessons from Bitcoin

By Bob Love

“The only thing necessary for the triumph of evil is for good men to do nothing.” ― Edmund Burke, 1776

“The [Bitcoin] system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.” - Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakamoto, 2009

Bitcoin was pseudonymously conceived in 2008 and introduced to the public in 2009.

  • In 2010, the first known commercial transaction using bitcoin occurred when programmer Laszlo Hanyecz spent ₿10,000 to buy 2 Papa John's pizzas [₿1=$.002].

  • By Dec 2020, the same ₿10,000 could buy 20,000,000 pizzas [₿1=$20,000].

  • This represents a massive deflation in the “₿ price” of a pizza … or a massive inflation in the “$ price” of a bitcoin … while the “$ price” of a pizza remained relatively constant.

In the interim years, everyone from speculating geeks to regulating central bankers have more or less carefully studied, adopted, scorned and/or feared this “open source peer-to-peer [P2P] digital money” as the future of currency.

Bitcoin’s apparent success as an alternative currency spawned an outbreak of numerous other digital currencies [DCs] … and now central bank digital currencies [CBDCs] … all sharing essential attributes with their own idiosyncratic twists. The result has been nothing less than a virtual course in what a currency is, can be, should be … or not. Let’s

  • examine a few lessons bitcoin [and the other DCs] are teaching us about currency and

  • draw some conclusions about the best currency options available to us.

Currency is public

Sect. 47. And thus came in the use of money, some lasting thing that men might keep without spoiling, and that by mutual consent men would take in exchange for the truly useful, but perishable supports of life. Second Treatise of GovernmentChapter 5: Of Property, Locke, 1690

“The use of metals [as currency] was attended with two very considerable inconveniencies; first with the trouble of weighing; and, secondly, with that of assaying them. ... To prevent abuses, to facilitate exchanges, and thereby to encourage all sorts of industry and commerce, it has been found necessary ... to affix a public stamp upon certain quantities of such particular metals, as were in those countries commonly made use of to purchase goods. Hence the origin of coined money, and of those public offices called mints ... to ascertain, by means of a public stamp, the quantity and uniform goodness of those different [coins] brought to market.” Wealth of NationsOf the Origin and Use of Money, Book I, Chapter IV, Adam Smith, 1776

“We are not afraid to entrust the American people with unpleasant facts, foreign ideas, alien philosophies, and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people." ― Remarks on the 20th Anniversary of the Voice of America; Department of Health, Education, and Welfare, John F. Kennedy, 1962

The first and most important quality of any currency is public acceptance. This can arise from

  • nature [physical fact eg. AU-gold],

  • convention [agreed rules transparent to and enforceable by public scrutiny eg. ₿] or

  • fiat [positive law eg. US$].

Bitcoin’s rules and the entire ledger of all bitcoins [and all their exchanges over time] are not only open to the public, they are kept by the public … or rather by all those who have the time and resources to do so in return for the privilege of generating new bitcoin “blocks”. Openness for bitcoin is not political but tactical.

  • The socio-logic of bitcoin rests on the assumption that transparency maintained by an honest majority exposes and checks the threat of hidden injustice by a dishonest minority … which sounds alot like democracy [demos+kratos = people+power].

  • If/when conditions ever allow “cooperative dishonesty” to overpower “collective honesty”, bitcoin will fail as a viable social medium … as a currency.

This risk notwithstanding, bitcoin’s open ledger convention is obviously superior to the closed books and systemic dishonesty of the private Federal Reserve which Congress adamantly refuses to open to public scrutiny … and that tells bitcoiners everything they need to know to reject the Fed’s fiat currency. The fact that bitcoins cannot [yet] be clandestinely counterfeited like the US$ makes bitcoin an attractive store of value … extending the “current” in currency well into the future.

Taxes should be public

“Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they require, print [central bank] notes for the balance.” ― The Economic Consequences Of The Peace, JM Keynes, 1920

Holders of bitcoin avoid being robbed by history’s most massive, regressive and secret wealth tax scheme … the funding of fiscal deficits with fiat currency [ie. the counterfeiting of fiat currency to monetize perpetual fiat debt].

I say “robbed” not because I am opposed to the honest and open collection of taxes to fund the public’s legitimate business, but because the use of monetary counterfeiting by private central bankers to enable and obscure fiscal irresponsibility by national public officials for the benefit of crony special interests is the definition of collusive treason against the People at large … and, as was the case in early American law, should be punishable by public execution [see below]. Holders of bitcoin want out of this perverted money-tax scheme.

And while this crime is grave in any republic, it assumes an unforgivable scale when those guilty of it are the fiduciaries for what [under the Bretton Woods convention] is the entire world’s reserve currency … the US$. Originally it was not supposed to be this way.

The failed separation of money and taxes

In the US Constitution Article 1 Section 8 Clause 5 and Clause 6 and in Section 10 Clause 1 enacted in 1789, the US Congress was exclusively entrusted with the power and charged with the responsibility

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures [and]

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States [provided that]

No State shall ... coin Money [or] make any Thing but gold and silver Coin a Tender in Payment of Debts.

The unambiguous foundational intent of the Constitution regarding money was clarified and codified in the Coinage Act of 1792 which

  • declared the Silver Dollar as the official unit of money in the United States,

  • pegged [aka regulated] the US$ to 371 4⁄16 grain (24.1 g) pure [or 416 grain (27.0 g) standard] silver while it

  • pegged the proportional value of gold and silver as 15 units of pure silver to 1 unit of pure gold,

  • defined Standard gold as 11 parts pure gold to one part alloy composed of silver and copper and

  • defined Standard silver as 1485 parts pure silver to 179 parts copper alloy,

  • provided under Section 14 that "Persons may bring gold and silver bullion, to be coined free of expense" and

  • established under Section 19 [which remains in effect today] a penalty of death for debasing the gold or silver coins authorized by the Act, or embezzlement of the metals for those coins, by officers or employees of the mint.

Money was constitutionally separated from Congress’ power to tax. But by using a central bank, Washington and Wallstreet colluded [led by Hamilton from the beginning of the Republic] to bypass the US Constitution and to collect taxes by de facto counterfeiting the currency in a perverse and clandestine scheme which anybody in his right mind would prefer to avoid if possible. [For more on the history of US central banking, read Central Banking: a Fatal Conceit.]

Banking should be private

“I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” ― Thomas Jefferson

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” ― Henry Ford

Bitcoin also allows users to avoid the most abusive sociological system ever devised by evil minds: central banking.

Bitcoin is P2P … peer-to-peer … money that neither arises from nor is exchanged through 3rd party banks. In fact, the very concept of a P2P DC threatens the entire central banking “system” with competition and collapse … which is why it will be attacked and regulated into irrelevance by politicians and central bankers globally ASAP.

Just as maintaining money is separated from collecting taxes in the Constitution, it should also be separated from all forms of banking which should be nothing more than the 100% reserved private intermediation of real private or public savings to real private or public investments.

Identity is private

“Arguing that you don't care about the right to privacy because you have nothing to hide is no different than saying you don't care about free speech because you have nothing to say.” ― Edward Snowden, 2015

The fact that currency is public need not compromise the privacy of those using it.

Bitcoin is not merely a currency … it is a crypto-currency. This means that in spite of its public ledger, bitcoin keeps the identities of its users private by requiring both a public key and a private key [theoretically known only to its holder … which means it can be lost] for every transaction. This part of the logic allows for

  • direct peer-to-peer transactions without the revelation of the transactors’ identities to some 3rd-party intermediary for validation of legitimacy/ownership.

And, of course, the fact is that many parties [especially those engaging in illegal activities] have much to hide in the transaction of their “busy-ness” and so this aspect of bitcoin is VERY attractive … and gives bitcoin another boost in its value as a currency of choice.

Currency is permanent

“Lay not up for yourselves treasures ... where moth and rust doth corrupt, and where thieves break through and steal.” Matt 6

“The greatest part of things really useful to the life of man ... are generally things of short duration; such as, if they are not consumed by use, will decay and perish of themselves.” ibid, Locke

A desirable quality of currency is “save”-ability … which means its value is more or less preserved from loss or destruction over time … its “purchasing power” is reliable for planning purposes.

In its infancy, all digital information was notoriously unreliable due to computer “crashes” of all sorts. But over time, technologies improved presenting us with the opposite problem: digital information can be reliably created and indefinitely preserved as long as the distributed and redundant digital infrastructure does not experience multiple [complete], simultaneous failures. Indeed, bitcoin is simultaneously [not instantaneously] staged and continuously coordinated across multiple “ledgers” any one of which can “go dark” without affecting the overall, on-going integrity of the system.

However, vulnerabilities of the structures in and through which digital information is stored and exchanged make the theft and misuse of digital currencies a rapidly growing problem.  

Credit is [supposed to be] temporary

“[Credit is a system whereby] a person who can't pay [in currency], gets another person who can't pay [in currency], to guarantee that he can pay [in currency].” ― Charles Dickens, Little Dorrit

As we have seen, bitcoin addresses some key criteria for a viable currency, but can it function as credit too?

Modern central banks’ increasingly desperate and lawless manipulation of fiat currencies in the economy at multiple levels is conjuring and backstopping wild speculation in many real goods and all financial instruments [including bitcoin]. This is destroying historically useful longterm debtor-creditor relationships as predicted by Keynes in 1920 … well before the advent of computers much less digital currencies:

“As the [fiat currency debauchment] proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.” ― The Economic Consequences of the Peace, JM Keynes, 1920

This means that bitcoin is unsuitable for long term contracting, saving or lending at this moment in history. But that is not a fault in bitcoin as a currency but rather in the still dominant but rapidly failing US$ fiat currency system into which perpetual US$ fiat credit is being intentionally injected to function as a currency substitute. This vicious adulteration of the US$ currency with perpetual US$ credit was a subtle, subversive strategy spawned by Alexander Hamilton and sponsored by George Washington in the earliest days of the republic. It was recognized and opposed by many through the decades of American history and held in relative check until the US$ was declared fully fiat by the Nixon Shock in 1971.

  • Today US$ currency and US$ credit are both fiat and are both becoming virtually indistinguishable.

Indeed, the current inability of bitcoin to function in a credit system is actually reassuring, since it reminds us that bitcoin enforces the distinction between currency and credit which Washington and the Federal Reserve have merged in their perverted and collusive acts of financial adultery.

My solution

The best solution is to restore money as a civil right. Those who know me know that in 2015 I did “my duty and share” [as Einstein admonished] and sued the Federal Reserve pro se in Central Kansas Federal District Court for unconstitutional and illegal departure from its mandate contained in The Federal Reserve Act Section 2A which sets forth the only legitimate Monetary Policy objectives as follows:

  • "[t]he Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of [not to attempt to redefine and manipulate directly] maximum employment, stable prices, and moderate long-term interest rates."

My Complaint Arguments, exhibits and case documents are part of the public record and are available on the left side of the FROTH blog.

As I explained to the Pachyderm Club, a cowardly Congress has abdicated its constitutional responsibilities and a rogue Federal Reserve has violated its statutory charter.

  • The recent result [not counting all the booms and busts] is a proliferation of desperate DCs which will likely annihilate more innocent people.

  • The wisest answer is not to press on with further perversions such as MMT or fiat CBDCs but rather to reconstitute the US$ by returning to the clear language of the Constitution and the Federal Reserve Act. This would accomplish two things:

  • require Congress to obey the Constitution and regulate the value of the US$ by periodically tying it [through promised redemption on demand as the Silver Certificate did domestically and as Bretton Woods did internationally] openly and transparently to one or more real commodities [with gold and silver being excellent candidates] and

  • require the Fed to obey the law and become a boring institution that ties changes in the money and credit aggregates to real production [a purely quantitative approach to monetary policy] leaving free markets to make decentralized economic decisions accordingly.

This approach is not novel. Indeed … it has long been common knowledge essentially set forth in Ruskin’s terse comments on money over 150 years ago … and most lately championed by the likes of Milton Friedman.

If we were to do this … a vast range of seemingly unrelated sociological and ecological problems would begin to resolve themselves almost overnight. Furthermore, the system I am proposing would not be inconsistent with DCs or even with CBDCs redeemable in US$ [known as stablecoins]. And although it would not be painless to turn from our currency perversions … it could, as Ruskin recommended, be just … and that is doubtless the best we can do as finite, human stewards of a finite, natural world.

Editor’s Note: Read all of Mr. Love’s response here.

 
Steve Witherspoon
Reader’s Response
 

A response to Steve Witherspoon’s “Seeking Educational Traction: The path to the New Normal”

Right-sizing Education

In the recent CANDOR “Front Burner”, Reeser, Ewy and Blankley [like the public at large] saw the COVID challenge to education as an unwanted and expensive but potentially opportune moment to compare conventional in-person-synchronized with pandemic virtual-asynchronous learning. Reeser went even further to suggest “we must start asking the question: ‘What is the best approach for an individual student.’” … a question which, if taken seriously, will bring calls for reVolution not merely eVolution in education … as “time, elections, trust and vouchers” provide stage and setting for diverse factions. Ewy voiced a warning about “opening people’s eyes” to alternatives they cannot “unsee”. Blankley candidly concluded there may not be a “right answer”.

But, perhaps, there is a “right answer” … which depends not on the method of communication but on the SIZE … of a class, of a school … even of a curriculum.

For example, in his address on “The Aims of Education” AN Whitehead stated:

“Every intellectual revolution which has ever stirred humanity into greatness has been a passionate protest against inert ideas. Then, alas, with pathetic ignorance of human psychology, it has proceeded by some educational scheme to bind humanity afresh with inert ideas of its own fashioning.

“Let us now ask how in our system of education we are to guard against this mental dry rot. We enunciate two educational commandments, “Do not teach too many subjects,” and again, “What you teach, teach thoroughly.

“The result of teaching small parts of a large number of subjects is the passive reception of disconnected ideas, not illumined with any spark of vitality. Let the main ideas which are introduced into a child’s education be few and important, and let them be thrown into every combination possible. The child should make them his own, and should understand their application here and now in the circumstances of his actual life. From the very beginning of his education, the child should experience the joy of discovery. The discovery which he has to make, is that general ideas give an understanding of that stream of events which pours through his life, which is his life.”

Blankley hinted at this in his comments on ”project based learning” but failed to articulate any  principles of size. Homeschoolers have long sensed the wisdom of Whitehead’s observations, but few would dare to reach for its power in a MOOC.

At Northfield School of the Liberal Arts in Wichita, faculty discovered the benefits of a “cohort class structure” using a “deep dive subject approach” in which a small group of students were largely attached together with a single teacher for the entire year in a series of intensive studies that crossed traditional subject lines … in a real life communal experience. Unexpectedly exceptional results encouraged all stakeholders to continue the practice in the coming year … no “return to normal” there. I am certain other schools have important discoveries to share as well.

I am also certain the effects of SIZE can be recognized by those educators who are willing and able to step back from the pandemic experience and look at education afresh. For those who would like to press on with this theme, I highly recommend reading JBS  Haldane’s wonderful essay titled “On Being the Right Size” in which he concludes:

“And just as there is a best size for every animal, so the same is true for every  human  institution.”

Perhaps, even after COVID’s uncomfortable disruption of the status quo, we are still not asking the right questions about education … public or private … classical or traditional … parochial or secular. If not, we have certainly missed an opportunity.

I will close with observations, a question and an answer by Whitehead in the conclusion of his address which might encourage us to examine our COVID excursion from another perspective … that of size.

"The first requisite for educational reform is the school as a unit, with its approved curriculum based on its own needs, and evolved by its own staff. ... When I say that the school is the educational unit, I mean exactly what I say, no larger unit, no smaller unit. Each school must have the claim to be considered in relation to its special circumstances. ... When one considers in its length and in its breadth the importance of this question of the education of a nation’s young, the broken lives, the defeated hopes, the national failures, which result from the frivolous inertia with which it is treated, it is difficult to restrain within oneself a savage rage.

"We can be content with no less than the old summary of educational ideal which has been current at any time from the dawn of our civilization. The essence of education is that it be religious.

"Pray, what is religious education?

"A religious education is an education which inculcates duty and reverence. Duty arises from our potential control over the course of events. Where attainable knowledge could have changed the issue, ignorance has the guilt of vice. And the foundation of reverence is this perception, that the present holds within itself the complete sum of existence, backwards and forwards, that whole amplitude of time, which is eternity."

Perhaps, COVID was nothing more than nature giving us all a religious education. Let’s be sure we take full advantage of the experience.

 
June 2021Bob Love
Seeking Educational Traction: The Path to the New Normal
 
Illustration: Thuan Pham

Illustration: Thuan Pham

What hath this pandemic wrought? 

Delayed learning, that’s what the world of education’s Semantics Police refer to when describing the pandemic’s impact on students during the past 15 months. Other educators might refer to it as the Covid slide, a combination of the typically brain-draining hot months of June-August, the summer slide, with our current virus-hampered state. Nationwide, summer school has taken on new significance as some schools are currently offering more classes to help students catch up, and to provide curricular friction to grade-level slippage.

Many changes will be debated, each based on lessons learned, and what students missed, during the Fourth Quarter of the 2019-20 school year and beyond, a turbulent period which was virtually locked down by Covid-19. And, much like the response to the spread of the virus, results will vary.

The State of Kansas demands K-12 student bottoms in specific seats for a school to merit funds to flow from Topeka, additional in-state funding largely comes from counties, and the LOB (Local Option Budget). Add in federal funding for Pell Grants, Title I, Special Education, and other line items, and suddenly the cost per student in Kansas for 2021-22 is expected to rise well over $11,000, with some estimates much higher. This paradigm has been the norm for decades.

With so much money allocated, and expectations growing, what has been learned during the past 15 months? How high are the stakes for public education as some parents, and politicians, call for a reboot, demanding more choices for students when the class bell next rings?

To consider these questions, and a few others, Stan Reeser and Ben Blankley, USD 259 Board members, and Ryan Ewy, Hutchinson High School’s principal, provide their unique perspectives during a pandemic which called for them to help craft numerous decisions that affected tens of thousands of students.


Ben Blankley and Stan Reeser discuss an agenda item at a recent USD 259 Board of Education Meeting (Courtesy Stan Reeser)

Ben Blankley and Stan Reeser discuss an agenda item at a recent USD 259 Board of Education Meeting (Photo courtesy of Stan Reeser)

Stan Reeser, President, Wichita Public Schools Board of Education

 Question #1. The pandemic has forced local educators to change several policies and traditions to strive toward quality education, as safely as deemed possible with changing directives and recommendations from the County, State, and Federal governments. What was the most difficult part of the process as the Board attempted to satisfy its various stakeholders while also staying focused on the community's health? 

The most difficult part of the COVID-19 decision-making process was trying to fall asleep after a major vote knowing that you had either hurt students or you had hurt educators or you have made some parent's life difficult. Usually when you help educators, you help students, or when you help students it eventually comes around and helps teachers. This was a case of choosing who to hurt the least.

2. Based on the experiences of the outcomes during the past two school years, what do you predict will return to normal during the 2021-22 school year, and what will remain the same as this school year in terms of dealing with education and public health?

3. Virtual learning likely produced mixed results these past two school years, with some students engaging and learning at home, while others struggled. Do you see USD 259 encouraging more online learning in the future? What are the pros and cons?

(The responses to these two questions are intertwined)

We (the community & education institutions) will be less scared of virtual learning. Virtual learning was seen in the past as something that was used as a last choice for students that struggled in traditional learning. I think in the future we will offer some type of virtual learning on an equal basis with traditional in-person learning. Of course, now, we hope we will have the luxury of exploring whether or not virtual learning is the proper path for a student instead of the necessity of remote learning (please note that I am interchanging virtual and remote learning). Unless the Kansas Legislature changes its mind (they won't) the concept of remote learning is morphing into virtual. We will use many techniques from remote and apply them to virtual, such as tighter schedules and more live teacher check ins. The interesting part is while the citizens, the students, and the education world adopts this new way of learning, members of the Kansas Legislature will become more entrenched to the learning models of the past.

Instead of thinking about what the pros and cons of virtual learning or traditional learning are, we must start asking the question: "What is the best approach for an individual student.”

 4. Given the challenges of the two pandemic school years, and the alternative learning structures many parents created out of necessity, do you believe home-schooling, charter schools, or perhaps a more fervent push for a voucher system in Kansas is a path USD 259, or other public school districts, might choose in the near future? 

Yes, there will definitely be a greater push for a voucher system for private/alternative school choices due to the pandemic. The political forces pushing this agenda in Kansas are powerful and have the numbers in the Kansas State House and State Senate. There were times, out necessity for public safety, the BOE had to make decisions that hurt families who live on the margin either economically or socially in our community.  They jumped on this and their political message now is, "See, that public institution is not interested in what you need." Time, and elections, will tell us whether or not the citizens believe this to be true. The nice thing we have in Kansas (and especially here in Wichita) is a generational trust in public education. In fact, that is one of the cornerstones that drives my decision-making process: will the community understand that these decisions were made in good faith and in the best interest of their child?

5. How far, if at all, has this pandemic obstructed learning for Wichita Public School students?

Believe it or not, this is a fairly easy question. If the student has or had a support system, or if they had the individual drive to succeed, then they were not obstructed in achieving or performing in their school work. If they did not have these two things, then they were probably already behind in learning and the turmoil of the pandemic on education will create an even greater learning gap. Public education mirrors the good and bad in any society. This pandemic will definitely exacerbate any divisions that already exist among groups of people attending our schools.

6. What do you believe Wichitans should know about the decisions made during the past two school years, and what direction the Board will take in the future?

I think the Board will look to return to normalcy. When I became President of the Board in January of 2021, my first message to the Administrative team and my colleagues on the BOE was, "We do not own this pandemic. We will perform our role in reducing the severity of the pandemic but we can do nothing about the battle between the Governor and the Legislature Leadership Council over safety guidelines or school building closings. We can't vote with the Sedgwick County Commission on whether or not to require masks. We will do the responsible things and then we’ll get back to education." The one thing everyone should know about the BOE is that there are three spheres of influence we must consider in all decisions: the students, the educators and staff, and the public. Rarely do we get to decide strictly on an issue that is exclusively beneficial to one stakeholder.


Ryan Ewy, Principal, Hutchinson High School, USD 308

1. The pandemic has forced local educators to change several policies and traditions to strive toward quality education, as safely as deemed possible, with changing directives and recommendations from the County, State, and Federal governments. What was the most difficult part of the process as the Hutchinson Board of Education attempted to satisfy its various stakeholders while also staying focused on the community's health? 

The initial closing of schools in the spring was primarily met with support as most people were fearful of the unknown and appreciative of the proactive approach. At that time, we were not a one-to-one school district and with 70% of our students identified as free and reduced, households lacked access to electronic devices and internet service. In response to that dynamic, we created paper packets and had students pick up and drop off their assignments/assessments in a drive thru process. Students that participated at any level received a passing grade. (This helped many of our students stay on track in terms of graduation and credit requirements. Again, was this the right or wrong way to handle this difficult situation?)

In the Fall, our BOE decided to open all schools for in-person learning with the option of staying remote and working from home. At this point we had become a one-to-one school, but our teachers and students still needed to be trained on new electronic devices and the Google Suite platform. Initially, all remote students were working on a program called Odysseyware with no direct instruction and limited teacher contact. Most of the community was happy with this option, but many of our teachers were not. They knew that we couldn’t properly maintain social distancing in this environment, and many felt they were being put in harm’s way. However, they didn’t necessarily like the option of students trying to learn on their own using Odysseyware. We had to maintain this posture though until all training was completed.

We also allowed all academic/athletic activities, programs, and concerts to continue while following the CDC and local health official guidelines. Generally speaking, when extra-curricular events get to take place the community is happy. Throughout the school year we changed our learning format several times as we adapted to new medical knowledge, educational trends, political power plays, and family needs (we went from in-person, to hybrid, to remote, back to hybrid, back to remote, back to hybrid, and finally back to in-person. I am not being sarcastic as this was the actual order and number of learning environmental changes).

Overall, I felt that we battled the 50/50 political divide that many other communities experienced. Half of our parents felt all students should be in school to promote academics and reduce social/emotional trauma. The other half felt that we were putting people’s health and lives at risk. Leadership decisions become very difficult when people express concerns about death and physical/mental health to promote their cause or belief. We tried very hard to accommodate both factions. With every decision I made half the people thought I was a genius and the other half thought I was a fool. And half of them were right.

2. Based on the experiences of the outcomes during the past two school years, what do you predict will return to normal during the 2021-22 school year, and what will remain the same as this school year in terms of dealing with education and public health?

Next year we are returning to full in-person instruction. Additionally, we are opening up a virtual school to accommodate students that want to learn remotely. No masks or social distancing will be required. We will still use Google Meet and Google Classroom to reach out to kids and post assignments.

3. Virtual learning likely produced mixed results these past two school years, with some students engaging and learning at home, while others struggled. Do you see USD 308 encouraging more online learning in the future? What are the pros and cons?

In addition to the above comments about virtual school and Google Classroom, we are looking to add a few hybrid and virtual courses for upper classmen, something we have never done before. I don’t believe education will completely return to its old form, nor should it. We now possess the technological training and tools to offer education in a whole new way (we just did it for a year). Moreover, we have shown that we can offer additional services like flexible scheduling, expanded credit/course offerings, and telehealth.

4. Given the challenges of the two pandemic school years, and the alternative learning structures many parents created out of necessity, do you believe home-schooling, charter schools, or perhaps a more fervent push for a voucher system in Kansas is a path USD 308, or other public school districts, might choose in the near future?

Unfortunately, for public education we may have worked ourselves out of a job. We have performed so well during this pandemic that it has opened up the door to other educational possibilities (right or wrong). People’s eyes have been opened and change seems inevitable. It’s like the old adage, “Once you see it, you can’t unsee it.”

5. How far, if at all, has this pandemic obstructed learning for Hutchinson Public School students?

Our graduation rate held steady, but our reclassification (students not meeting the credit requirements to advance to the next grade level) rate has increased. I don’t know the exact reclassification percentage as the counselors are still verifying all grades, but the preliminary numbers are not very good. In addition, our local assessments revealed that many of our students are half, or a whole, grade level behind in many competencies. We are having Summer School this year to see if we can “close the gap”, but only time will tell. This is the first time we have had an in-person Summer School at HHS for many years. We are having sessions in both June and July to try and recover some of our lost learning and knowledge deficiencies.

6. What do you believe your stakeholders should know about the decisions made during the past two school years, and what direction the Board, and Hutchinson High School, will take in the future?

The safety and well-being of students, staff, and families was at the forefront of every decision. We didn’t always get it right, but our hearts and minds were in the right place. We made decisions with no playbook, textbook, or resource. A nation-wide closing of public schools was unprecedented. We learned, shared, cried, cussed, and ultimately prevailed. However, we will be dealing with the residual effects of this pandemic for many years. I have never been prouder to be an educator in my life

Ben Blankley, Vice President, Wichita Public Schools Board of Education

1. The pandemic has forced local educators to change several policies and traditions to strive toward quality education, as safely as deemed possible with changing directives and recommendations from the County, State, and Federal governments. What was the most difficult part of the process as the Board attempted to satisfy its various stakeholders while also staying focused on the community's health?

In my opinion, the most difficult part of the decision making process was that each difficult decision came down to us as individual school board members, and we didn't really have good federal, state, or local guidance on what was considered best practices until far into the school year. That opened up a lot of second guessing, among both board members and community stakeholders. There was never a "right" answer, and as a region, we ended up with remarkably different experiences for students and staff in our suburb and exurb districts versus our urban district.

2. Based on the experiences of the outcomes during the past two school years, what do you predict will return to normal during the 2021-22 school year, and what will remain the same as this school year in terms of dealing with education and public health?

I predict we'll get back to more community and parent volunteering in the fall. We'll also resume larger student activities like field days and pep rallies, at least outdoors. What I hope remains the same is people being encouraged to stay home when sick, and the flexibility of the education system to handle that. It's predicted that we won't have COVID-19 vaccines available for children under 12 until late fall 2021, so we will still be in a "test, quarantine, contact trace" mode with our school nurses for next school year as well at least at the elementary level. My hope is that this pandemic experience gets more students and staff aware of how any respiratory illness can negatively impact learning for all, so even more people get their annual flu shots and stay home when they are sick.

3. Virtual learning likely produced mixed results these past two years, with some students engaging and learning at home, while others struggled. Do you see USD 259 encouraging more online learning in the future? What are the pros and cons?

With how college and career learning shifted to more asynchronous and project-based learning, even prior to the pandemic, I can see that being further emphasized in our school district. As a current district parent, I would certainly appreciate the opportunity to continue formal learning when my child must miss school for various reasons. I anticipate the families for whom virtual learning worked really well will demand some asynchronous learning in their future school years.

4. Given the challenges of the two pandemic school years, and the alternative learning structures many parents created out of necessity, do you believe home-schooling, charter schools, or perhaps a more fervent push for a voucher system in Kansas is a path USD 259, or other public school districts, might face in the near future?

I think we'll still see about 10% of our region's students opting for the non-public educational setting, and I don't anticipate that changing very much in future years. The political will may exist in our state to extract public school funding for private schools, but the percentage of students participating won't change much. The size and complexity of our district enables a lot of programs and opportunities for students that just don't exist elsewhere. Non-pubs have their roles, but they don't, and can't, serve all students with their limited mission, scope, and purpose.

5. How far, if at all, has this pandemic obstructed learning for Wichita Public School students?

The assumption going into the fall was that the Spring of 2020 was an exceptional challenge that increased the expected summer slide for a large portion of our students. The exceptional students were doing exceptionally well throughout the year, and our students with intense learning challenges continued to receive additional supports. By the end of this school year, I believe those students in the middle probably missed out on the most learning and have the most to make up.

6. What do you believe Wichitans should know about the decisions made during the past two school years, and what direction the Board will take in the future?

These decisions we made regarding the pandemic were the most gut-wrenching, impactful decisions most school board members will ever make in their entire public service. The scrutiny over the past 15 months that we put on ourselves (and the public put on us) to be informed and reactive to stakeholder concerns throughout this pandemic was emotionally draining and will seriously affect us for the rest of our lives. We all know more about COVID-19 now than we did in December, last fall, last summer, and last March. When looking back at the decisions all local school boards made, we should remember that we were all trying to be as reasonably cautious as we felt was necessary with what we knew at the time.


 
Wave Goodbye to Low, Low Prices?
 
Illustration: Thuan Pham

Illustration by Thuan Pham

Are our Fears inflated?

What do you get when you fill a room with economists, and a passel of recess-deprived kindergarteners? Uncertainty? Chaos? Lines scribbled on the walls with intended meaning? Perhaps all of the above. Based on several significant indicators, the U.S. economy should be bracing for dramatically high inflation rates, but not all economists agree the result will be debilitating, or even notable. Let’s study some of the common rising price warning signs to help us determine if the nation’s predicted inflation surge line will soon be dramatically represented in permanent ink:

1. Cost-push inflation occurs when prices rise due to increases in production costs, such as raw materials and wages. Wages are typically the single biggest expense for businesses, and the trend in several states, and at the federal level, is to raise wages.

2. Natural disasters can also drive prices higher; the nation has suffered from dozens of these over the past decade. Should COVID-19 reside in this category?

3. Demand-Pull inflation can be caused by strong consumer demand for a product or service. One familiar example is the housing and business construction market, which is experiencing high demand for both new construction and renovating existing edifices. Building material costs for concrete, lumber, and steel continue to rise as manufacturing and distribution for those, and many other related items, are COVID-impacted.

4. Increased government spending on infrastructure projects are on the negotiation table, and Congress is facing pressure to deliver during this legislative session.

5. Rising Federal Reserve debt monetization (officially dubbed quantitative easing) is becoming monetary policy operandi; U.S. debt continues its precipitous climb as the Reserve buys U.S. Treasury bills, bonds, and notes from member banks, and recently, a diverse portfolio of corporate debt.

The Consumer Price Index, which measures prices for a shopping basket of goods and services, including food, cars, education, and recreation is predicted by many economic forecasters to exceed the persistent 2% inflation baseline targeted by the Federal Reserve Board, with several goods and services expected to rise well above that marker this year.

 So which indicators are most predictive? What will the actual inflation rate look like for 2021 and beyond? Providing answers to those questions, and others, while interjecting relevant historical context, are our insightful native Wichitans, the Battling Bobs. Messieurs Litan and Love, who’ve provided unique perspectives over decades on the economic issues of the day, have graciously weighed in: which of their ideas pack the bigger punch?


Some Humility in Forecasting Inflation

By Robert Litan

Those of us, like the other Bob and I, who grew up in the 1950s and 1960s have seen lots of changes in our lives, in our society, our economy and our politics since then. But in the economic realm one of the most remarkable has been the taming of consumer price inflation.

Throughout the first quarter century of the post-War era, during which economic growth galloped ahead at almost an annual rate of 4 percent, compared to the anemic 2 percent over the past 15 years or so, a central concern of policy makers was how to reconcile low unemployment with low inflation. It was thought to be impossible, and indeed encoded into standard macroeconomic theory through the “Phillips’ curve” which traced an inverse relationship between the two: the higher the unemployment rate, the lower the inflation. The converse was true as well.

The Phillips curve relationship held up reasonably well until 1973, when the world literally changed: the oil embargo of the Arab OPEC nations quadrupled oil prices, which led to a lengthy period of “stagflation,” both high unemployment and high inflation. This continued after the Iranian revolution, which sent oil prices skyrocketing upward even higher. Only when the giant inflation fighter – literally – Paul Volcker became Fed Chairman in 1979 did the Fed turn off the monetary spigot, slowly squeezing inflation from its double digit heights of the late 1970s and early 1980s back into 4 percent territory by the time he was effectively forced out of his chairmanship in 1986 by dissenting Fed governors at that time.

But the inflation-fighting success came at a horrible cost, precisely what the Phillips Curve would have projected: a spike in the unemployment rate to a peak of nearly 11 percent in 1982, but it too began falling well into the 1990s and beyond.

In the meantime, of course, not everyone accepted the tradeoff between inflation and unemployment implied by the Phillips Curve. The most prominent critic was Chicago’s Milton Friedman who long championed the view that inflation was solely the product of printing money – “monetarism” -- and who later supplemented his views with a revision of the Phillips curve too. Friedman argued that low unemployment not only was associated with a higher rate of inflation, but that the inflation rate itself would accelerate over time, as firms and workers incorporated expectations of future inflation into their forecasts and began increasing their price and wage demands at an even faster clip. The only way to prevent this wage-price spiral was to nip it in the bud by cutting off monetary oxygen – namely, by strictly controlling the growth of the money supply.

Volcker adopted the language of monetarism to justify his inflation-fighting campaign – protesting (a bit too much) that all the Fed could do was control the money supply, and if interest rates soared in the process, which they did in the early 1980s, that was out of his hands. Of course, that wasn’t true, but Volcker’s public fealty to monetarism provided a convenient cover for fighting the inflation dragon without admitting that sky high interest rates helped him do that.

I recite all this history first to set the stage, but also to educate readers who may be a lot younger than the two “Bobs” of how inflation was so top of mind for much of the post-War period, at least until the 1990s, by which time it had fallen off to 4 percent or less, and since then has drifted even lower. Younger readers will therefore wonder, understandably, why inflation is such a big deal, since they’ve lived and grown up in a world of relatively low inflation by post-War standards.

Roll the clock forward to the decade after the 2008-09 financial crisis and the worst recession since the Depression. The government fought that event through a (then) unprecedented, and heavily disputed, combination of fiscal and monetary stimulus, which halted the recession and enabled the economy to recover over the next decade. Too slowly, as it turned out, since many economists (including yours truly) believe that the stimulus post -2008 wasn’t enough.

But whether it was or it wasn’t, throughout the ten years of post-2009 recovery, many monetarists kept warning that the creation of so much money, especially through Fed “quantitative easing” – large-scale purchases of government bonds, much of them with longer maturities – would eventually ignite a burst of large and continuing inflation. After all, Friedman had warned decades before that inflation was the product of “too much money chasing too few goods,” and so quantitative easing had to spark inflation.

But it didn’t, for a simple reason. Monetarism assumed that the “velocity of money” – the rate at which it turned over – was constant, so that the more money, the higher inflation. In the post-2009 world, however, velocity dropped and kept dropping, because so many people and firms kept the newly created money in their bank accounts and didn’t spend it, or if they did, they bought stocks and bonds, pumping up their prices, but not the prices of goods and services. As a result, consumer price inflation throughout the past decade has been remarkably subdued, at annual rates less than 2 percent, so low in fact, that Fed governors have wanted to push it a bit higher so they would have more room to cut interest rates in the future to fight off recession, and also to encourage consumers to buy more now, rather than wait.

Then the pandemic hit in March, 2020, sending the U.S. economy into a Depression-like tailspin. The Fed and the federal government responded with an even more unprecedented combination of money creation and government deficits from multiple “rescue” packages totaling about $5 trillion. And so now the inflation concern is back, this time with more than just monetarists worried. So, too, are leading Keynesians, like former Treasury Secretary Larry Summers and Harvard professor and former IMF Chief Economist Olivier Blanchard, formerly of MIT.

The current Fed Chairman, Jay Powell, is not as worried. Also in his camp is his predecessor and now the current Treasury Secretary Janet Yellen. The main reason they aren’t as concerned, aside from the persistent low velocity of money, is that 4 million workers have left the labor force since the pandemic, most of them women – indicating that there is a lot of slack in the labor market not captured by the 6% unemployment rate (which is computed by dividing the current numbers of unemployed seeking work by the total labor force, which includes the employed and those seeking work). With more slack, a bounce-bank in consumer demand should not lead to dramatically higher prices overall.

In addition, both Powell and Yellen, among others, point to the fact that if inflation picks up in a sustained way, they can fight it, as Volcker did, by constraining the growth of the money supply or raising short-term interest rates (by selling the Fed’s bonds and soaking up money that way). What neither Powell nor Yellen emphasize, however, is that if they are forced into raising rates, history says they are likely to spark another recession.

So, where does all this leave us? In a land of a lot of uncertainty, perhaps as much as any of us has seen in our lifetimes. Will the economic rebound, now widely forecast to show 6% growth in GDP this year, stall because the COVID variants get out of control and push the economy back down? Or will the variants be squashed by the vaccines, allowing a growth boom? If growth booms and causes supply shortages in parts of the economy – as would no doubt happen – will the price spikes be temporary, or will they set off a new economy-wide price-wage inflation spiral?

The truth is no one really knows the answers to these questions. My personal view is that given the quiescent nature of inflation for over a decade, it will take a sustained price jump across multiple sectors, perhaps over several months, to change market psychology. My bet is that this won’t happen.

But we could see a sustained jump in longer term interest rates – independent of what happens to inflation – or in “real” interest rates, if private sector investment rebounds and competes with the government’s heavy borrowing. For investors and homeowners that prospect to me is the most worrisome, though I can’t down a number for you, and most experts who have tried to do so in the past have missed. I don’t want to join that club.


The Inflation Psychosis

By Bob Love

Real money and civilization

"When the division of labour has been once thoroughly established, it is but a very small part of a man’s wants which the produce of his own labour can supply. ... In order to avoid the inconveniency of such a situation, every prudent man in every period of society... must naturally have endeavoured to manage his affairs in such a manner, as to have at all times by him, besides the peculiar produce of his own industry, a certain quantity of some one commodity or other, such as he imagined few people would be likely to refuse in exchange for the produce of their industry. … The use of metals [as the people’s common commodity] was attended with two very considerable inconveniencies; first with the trouble of weighing; and, secondly, with that of assaying them ... [which] gave occasion to the institution of coins, of which the stamp, covering entirely both sides of the piece and sometimes the edges too, was supposed to ascertain not only the fineness, but the weight of the metal. … It is in this manner that money has become in all civilized nations the universal instrument of commerce, by the intervention of which goods of all kinds are bought and sold, or exchanged for one another.”

― Wealth of NationsOf the Origin and Use of Money, Book I, Chapter IV, Adam Smith, 1776

In a few short paragraphs, Adam Smith eloquently explains the virtue of real money in promoting the advance of human civilization consistent with natural order. I say “civilization” and “real” because at all times in Smith’s exposition, money is

  • a social medium functioning as a vital part of the people’s commonwealth [via their constitution]

  • derived from and attached to “real” commodities

  • meaning human economy remains safely restrained by natural ecology. [To understand why and how natural ecology comes before human economy see the e3 website and study the related links].

But, as sages from Moses’ 10 Commandments to Madison’s Federalist #10 and from Buddha’s Middle Way to Bastiat’s Law warn, humans rebel against nature’s restraints on their insatiable appetites … and so [what Keynes called] the “debauchment of the common currency” is inevitably conceived in the [what Madison called “improper or wicked”] minds of a few uncivilized delusionals … ie. elite sociopathic psychotics … and money is soon perverted for all and civilization set on a course to destruction.

Counterfeit-fiat money and psychosis

Sociopaths are approximately 4 percent of the United States adult population. ... The chances that you will run into one are fairly high. It helps to recognize the patterns of their seductions and to always maintain a healthy skepticism, especially when your gut feelings sense something is contradictory about what a person says and what they actually do.”
 Will You Be Seduced by a Sociopath?, Psychology Today

Psychosis occurs when an individual [or group] loses touch with reality … [It] is a symptom, not a classifiable disorder in and of itself.”
 Psychosis, Psychology Today

“When a delusional person’s bizarre beliefs spread to otherwise mentally healthy individuals via repeated contact with the abnormal person, the result is a shared psychotic disorder. The delusion contaminates others as if it were a contagion.”
 Is QAnon a Shared Psychotic Disorder?, Psychology Today

Roman emperors [except Diocletian] and American bankers [without exception] share a sociopathic lust for money. And both resort[ed] to the same practice to obtain more of it: put an official image on it to assure the public of its virtue then counterfeit it to deceive the public about its value … which begins with the physical adulteration of the coinage but ends in money’s complete detachment from any real commodity.

  • Hogeland’s Founding Finance explains how the American people’s common currency was hijacked by elite corporate and banking sociopaths [led by the adulterous Alexander Hamilton] before the Republic was even official.

  • Elder’s new thought provoking biography Calhoun: American Heretic tells how a few heroic second generation Americans realized that the common currency and public credit had been stolen by the elites and how they successfully restored both to the Republic as vital parts of the people’s constitutional commonwealth.

  • But Griffin’s The Creature from Jekyll Island: A Second Look at the Federal Reserve tells the story of Washington’s ultimate 1913 betrayal of the American Republic to the international corporate/banking cartel which rules the world today by controlling and manipulating its money.

After the Nixon Shock of 1971, the US$ [the world’s currency] became fully counterfeit, fiat money … with George Washington’s picture belying the Federal Reserve’s empty promise … as the US Treasury Silver Certificate was replaced by the Federal Reserve Note. But it gets worse.

Satan’s first miracle: turn debt into money … fiat credit

"Rather than seeking to liquidate the national debt, Alexander Hamilton recommended that government securities pay sufficient interest to be traded at par promoting their perpetual circulation as legal tender equivalent in face value to hard currency."
 First Report on the Public Credit, made by Alexander Hamilton to Congress, 1790, Wikipedia

“As often is the case with addictions, the fanciful notion of a gradual discontinuance only provided a comforting pretext for more sustained indulgence.”
― Ron Chernow [on Alexander Hamilton's secret life of marital adultery]

With the US$ officially detached from real commodities in the Nixon Shock, the elite sociopaths were free to simply print infinite amounts of it for distribution to cronies. And that’s just what they did, until inflation raised its hydra heads [which modern science tells us neither age nor die] to threaten the existing social order ... as it inevitably does in the universally lurid and eventually disastrous history of paper money.

Fearing their monetary spell over the public might be broken by trying to answer lingering, unwanted questions about the prudence [much less the justice] of their practices, the elites selected an erstwhile Heracles named Volker to slay the unconstitutional fiat money creature they created to pillage the commonwealth and enslave the Republic.

But in the process they realized that they did not need to crudely print fiat money when they could subtly use the central bank to create fiat credit in non-repayable, unlimited amounts which could be distributed … at subsidized low interest rates … through the banking system … to credit-hungry public and private cronies … crushing the common currency as effectively as fiat money and crushing real savers as well while securing control of the broader market for public and private debt [and all other financial assets] … the Trojan horse that would permit them to enter the next phase of their global monetary mass psychosis and cement their central-planning control of the global economy.

Eating their offspring

“The exact evolutionary purpose of the practice by [certain species of eating their offspring] is unclear and there is no verifiable consensus among zoologists; it is agreed upon though that it may have, or may have had at some point in species' evolutionary history, certain evolutionary and ecological implications.”
― Wikipedia

Spawning unlimited public and private debt backstopped by central bank fiat credit quickly became the elites’ tactic of choice for plundering the world’s commonwealth … and remains so today. But they cannot stop with merely spawning debt that is inherently unpayable.

So, following Hamilton’s cunning act of rolling the colonies’ revolutionary war debts into the national debt to strengthen the powers of the central government and weaken state sovereignty, the global financial elites have conspired to dump the unpayable trillion$ of state, local and private debt they spawn into a sea of unlimited fiat credit by having central banks simply  “buy the bad debt and bury the evidence of their adultery” in an act of filial cannibalism.

However, COVID interrupted/accelerated their plans … but since they cannot consume all the debt that is ready to collapse quickly enough, they have simply declared it suspended indefinitely in a desperate act of open totalitarianism … hopeful that the Republic’s short-sighted common poverty and mass monetary psychosis will maintain submissiveness.

Inflation: gospel or mirage?

“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
― Economics in One Lesson, Chapter 1: The Lesson, Henry Hazlitt, 1946

The next act in this tragedy is for the elites to use their economist priesthood to reintroduce Keynes’ “continuing process of inflation” into the public’s mass psychosis as a “positive good” for everyone [a term made famous by John Calhoun when he claimed that slavery was just that]. But they know this claim is an outright lie, because as Hazlitt explains, inflation is a stealth global wealth tax that

  • is collected through lo$$ of purchasing power from those who hold their wealth in the form of Labor [for wage$] or Saving$ [in the common currency] and

  • is distributed through price increase$ to those who hold their wealth in the form of Real Assets or Borrowing$ [in the common currency].

The elites’ great high priest, Fed Chairman Powell, has even been so bold as to declare that as [no longer when] this positively good inflation comes “we're not going back to the same economy”. And, thus far at least, the mass psychosis is holding and the majority of Americans are actually baa-ing for “more stimulus/inflation” … like sheep for their own slaughter … as we noted in the PS to our last Candor article on the minimum wage.

For, you see, the easily distracted people of the Republic have never learned the immutable relationship between ecology and economy or the fundamental lesson of economics which Hazlitt so eloquently set forth above. And so they will never understand what Hazlitt called The Mirage of Inflation until it has swallowed them whole.

The people are lost in this mass psychosis from which any return to rationality now appears unlikely, because, as both Keynes and Hazlitt predicted, even the honest economists [and there are a few], when pressed, will equivocate [humbly or not] and misdiagnose, because the symptomatic unfolding of monetary inflation is factually subtle and circumstantially complex.

  • “The [continuing process of inflation] engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one [economist] in a million is able to diagnose.” Keynes, 1920

  • “Inflation itself is a form of taxation. It is perhaps the worst possible form, which usually bears hardest on those least able to pay. … It encourages squandering, gambling, reckless waste of all kinds. It often makes it more profitable to speculate than to produce. It tears apart the whole fabric of stable economic relationships. Its inexcusable injustices drive men toward desperate remedies. It plants the seeds of fascism and communism. It leads men to demand totalitarian controls. It ends invariably in bitter disillusion and collapse.” Hazlitt, 1946

But even so, as John Nash observed, what hard evidence there is [both historically and concurrently] of inflation violating “the limits on a person’s relation to the cosmos” … even if coherently presented by honest economists … could not alone dispel the deepening psychosis that controls a majority of the American public [as Hayek observed of the German people under the spell of national socialism even as their circumstances deteriorated].

The hard evidence against the sociopaths

Nevertheless, I offer the following as proof beyond a reasonable doubt [the evidentiary standard in this public criminal trial of the sociopaths] that inflation is already advanced and bearing down with increasingly dire consequences for the entire planet.

  • The price of gold indicates that the purchasing power of the US$ has decrease by 98% since 1971 when Nixon reneged on the Bretton Woods Agreement resulting in the slow collapse of the middle class' key societal roles as the economic SAVER$ and thus political RULER$ of the nation.

  • The elite’s [and their economists’] “official” inflation statistics are nothing less than “1984 doublespeak from the Ministry of Truth” designed to under-report inflation … as repeatedly demonstrated by “healthy skeptics” like John Williams' "Shadow Stats" and Wolf Richter’s “Wolfstreet” … by redefining some prices and excluding others altogether.

  • Using “rent” instead of housing “prices” is just one example of the manipulation, since “rent” tends to follow “mortgage payments” which can be suppressed using manipulated fiat interest rates while actual housing prices soar.

  • The inflation we experienced domestically in the 1970’s was subsequently and criminally exported [a form of toxic American financial waste dumping] to and absorbed by the innocent productivity of the working poor of the world [from Japan to VietNam] via the US$ as a global reserve currency through our massive consumption of imports and continuing trade deficits.

  • But this too will pass … resulting in the sudden collapse of the US$ as the world successfully rebels against this cruel US financial imperialism. And when that happens, living Americans will be forced to reap what past Americans recklessly sowed globally. We are seeing the rapid unfolding of this rebellion with numerous private and public digital, global currencies like BitCoin and the Russian and Chinese digital currencies attempting to flee what everyone knows is a counterfeit US$.

  • The inflation “tax” effecting a global wealth transfer [predicted by both Keynes and Hazlitt] is well documented and unprecedented. And while inequality of wealth is part of any virtuous economic system, this systemic inequality is sociologically unjust and must “reshape” the economic system we have known [where the word “tax” is a Greek word which simple means “to shape or form”].

  • [And if you will stop to think about it, it is arguably just that inflationism should lead to socialism, because the “wealth” it produces was extracted - via the inflation tax - from the public which should thus be entitled to enjoy it in common.]

  • And finally, for those who can manage to step outside their personal e-bubble, the planet itself … nature herself [to make it personal] … is more and more clearly struggling [and failing] to absorb the toxic waste from our increasingly frequent bouts of financial stimulation [a phrase suitable for public use instead of one that is more anatomically descriptive].

  • And when her absorption of our environmental rapine finally ends … which it will [first gradually then suddenly] … the full effect of the massively inflated costs we are currently externalizing into the environment and then ignoring in our “economic” accounting for inflation will finally become as hideously obvious to us as they already are

  • to the climate [in turmoil],

  • to the wild world [in mass extinction],

  • to our own progeny [in the growing intergenerational judgment that justice demands] and, if you can believe it,

  • to God [Rev 18] who, we are told, will declare “the time has come to destroy those who are destroying the earth” [Rev 11:18].

I rest my case … and leave the verdict to YOU the jury.

Bob Love

PS. Making the curse work backwards

“Come now, you who are rich, weep and wail over the misery to come upon you. Your riches have rotted and moths have eaten your clothes. Your gold and silver are corroded. Their corrosion will testify against you and consume your flesh like fire. You have hoarded treasure in the last days. Look, the wages you withheld from the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord of Hosts. You have lived on earth in luxury and self-indulgence. You have fattened your hearts in the day of slaughter. You have condemned and murdered the righteous, who did not resist you.” 
James 5:5-6

Exposing and convicting the sociopaths in our midst is only the first step in our repentance. Once the psychosis is broken, we must “do” something and that requires intelligence.

So I leave the reader with a challenge to consider his/her moral obligation to be intelligent … and to ask why money arose after property and markets which were already advancing man’s material welfare within the limits of nature by facilitating a continuous, dynamic and just redistribution of the products of human labor and tools applied to the planet’s natural resources.

This pre-money arrangement is summarized in a fundamental equation which unites natural ecology and human economy:

Man’s Material Well-being  =  Natural Resources   +  (Labor * Tools)

But once money is added and then “financially” detached from all natural resources [ie. made fiat], money loses its natural and limited reason for existing at all and the fundamental equation begins to function as an unnatural, unlimited psychotic curse ... which the Federal Reserve now promotes as “the wealth effect”.

If this psychotic curse is to be broken, it will be because [as Aslan explained to Lucy and Susan at the StoneTable] "there is a magic deeper still which [finance does] not know ... that when a willing victim who has committed no treachery is killed in a traitor's stead ... Death itself will start working backward." And as James noted above, many willing and innocent laborers have already been slaughtered by the financial traitors and the number continues to grow. So we can start the curse working backwards … but only by taking the FIRST step of restoring our money’s hard link to nature’s resources as proposed above.

This restoration will almost immediately demand that we take a SECOND step backwards … and reconsider property which came after natural resources but before money. In that spirit, I encourage Candor’s readers to ponder [as did Adam Smith and others] John Locke’s 1690  Second Treatise of GovernmentChapter 5: Of Property which speaks of divine purpose, of humanity, of natural resources and of property … both before and after money. It contains a true wealth of worthy ideas [including a description of real savings] which, if thoughtfully heeded, will certainly help us continue to unwind the psychotic financial curse gripping us today.

“[M]en come to have a property in several parts of that which God gave to mankind in common, and that without any express compact of all the commoners. ... As much as any one can make use of to any advantage of life before it spoils, so much he may by his labour fix a property in: whatever is beyond this, is more than his share, and belongs to others. Nothing was made by God for man to spoil or destroy. And thus, considering the plenty of natural provisions there was a long time in the world, and the few spenders; and to how small a part of that provision the industry of one man could extend itself, and ingross it to the prejudice of others; especially keeping within the bounds, set by reason, of what might serve for his use; there could be then little room for quarrels or contentions about property so established. ...

“This is certain, that in the beginning, before the desire of having more than man needed had altered the intrinsic value of things, which depends only on their usefulness to the life of man; or had agreed, that a little piece of yellow metal, which would keep without wasting or decay, should be worth a great piece of flesh, or a whole heap of corn; though men had a right to appropriate, by their labour, each one of himself, as much of the things of nature, as he could use: yet this could not be much, nor to the prejudice of others, where the same plenty was still left to those who would use the same industry. …

[For] the greatest part of things really useful to the life of man, and such as the necessity of subsisting made the first commoners of the world look after, as it doth the Americans now, are generally things of short duration; such as, if they are not consumed by use, will decay and perish of themselves: gold, silver and diamonds, are things that fancy or agreement hath put the value on, more than real use, and the necessary support of life. ... And thus came in the use of money, some lasting thing that men might keep without spoiling, and that by mutual consent men would take in exchange for the truly useful, but perishable supports of life.

Thus in the beginning all the world was America, and more so than that is now; for no such thing as money was any where known. Find out something that hath the use and value of money amongst his neighbours, you shall see the same man will begin presently to enlarge his possessions. ... But since gold and silver, being little useful to the life of man in proportion to food, raiment, and carriage, has its value only from the consent of men, whereof labour yet makes, in great part, the measure, it is plain, that men have agreed to a disproportionate and unequal possession of the earth, they having, by a tacit and voluntary consent, found out, a way how a man may fairly possess more land than he himself can use the product of, by receiving in exchange for the overplus gold and silver, which may be hoarded up without injury to any one [real savings]; these metals not spoiling or decaying in the hands of the possessor. This partage of things in an inequality of private possessions, men have made practicable out of the bounds of society, and without compact, only by putting a value on gold and silver, and tacitly agreeing in the use of money: for in governments, the laws regulate the right of property, and the possession of land is determined by positive constitutions.

Locke explains things from “the beginning” forward. If he is correct, perhaps, the forces of movement forward to a “just commonwealth” from “free markets” has already begun … bringing us “back” to where we began in many ways. If true, the inflation psychosis may just be the catalyst for a new revolution. Think about it.

 
Curative Wages? Debatable, at Minimum
 
Illustration: Ainsley Christofferson

Illustration by Ainsley Christofferson

As Albert Einstein might say of this current minimum wage debate, “It’s all relative.” What seems to be good economic policy, though, is transformed by the gravity of 535 members of Congress, and 50 independent-minded states, 29 of which have already raised the floor beyond $7.25 an hour. What is the right amount? What constitutes a “living wage,” or perhaps phrased more ideally, what do humans truly need to live a healthy, enjoyable life?

In 1938, Franklin Delano Roosevelt, a patrician forever legislatively targeting the “common man,” signed off on the Fair Labor Standards Act, which at that moment, assigned an $11 per (44-hour) week, 25 cents per hour wage to all workers of businesses engaged in interstate commerce, roughly 20% of the U.S. workforce. While several of FDR’s acronym-laden plans for defeating the Great Depression were declared unconstitutional by the ever-orbiting forces exercised by the U.S. Supreme Court, the minimum wage eventually survived a gauntlet of prior court rejections to become the law of the land.

In the 72-year progression of minimum wage rates, however, the highly subjective federal increases have been based on aggregated data, not necessarily properly tempered with regard to geography, task, and rates of inflation. Questions abound, and the recent proposal by President Biden to raise the federal rate to $15 per hour has many small business owners, among others, concerned about their ability to compete given higher labor expenses during this pandemic-ravaged economic period.

To provide even more gravity (and gravitas) to the discussion, Bob Litan, former Wichitan, and Brookings Institute Senior Fellow, faces off with former Love Box Co. General Counsel Bob Love to propose ideas and solutions related to the minimum wage debate. Read both contributions as you shape your opinions about pending legislation, and respond (editor@candor.news), with your thoughts.

 


The Minimum Wage Should Be Set at the Poverty Level, Vary By Location, But Allowed to Rise with Inflation

By Robert Litan

The U.S. first adopted a national minimum wage in 1938 – of just 25 cents per hour. Since then, instead of just allowing the minimum to automatically adjust with inflation, Congress has intermittently raised the minimum 12 times, the last time being in 2009, when the floor was set at $7.25 per hour, equivalent to about $9 per hour since with adjustment for inflation.  

In fact, most states have raised the minimum to at least that level and several states – including Florida, Illinois, Massachusetts, and New York -- as well two cities (Seattle and Washington, D.C.) – either already have set the floor at $15 per hour or it will rise to that level gradually over the next few years.

 This is federalism in action, as it should be. Costs of living and average wage levels, reflecting average productivity (revenue generated per labor hour), vary across states and cities. So should the minimum wage.

What’s the case for a national wage floor – above which willing states and localities can go? The technical economic justification for any minimum wage, state or federal, rests on the notion of “monopsony” – where a single buyer has no competition and able to suppress wages below employee productivity -- just as a monopoly, a single seller, is able to jack up prices for goods or services well above marginal cost and an allowance for profit. In each case, in principle, government intervention is warranted to limit the distortion of the market.

Labor markets, however, are highly localized. Only smaller cities in rural areas are likely to be dominated by one -- or possibly two – employers needing entry-level labor. Accordingly, the monopsony argument is a thin basis for imposing a national wage minimum.

The better case for a national minimum wage is both political and moral: it is simply inhumane for employers to pay full-time workers less than poverty-level wages. Meanwhile, higher wages, to a point, can reduce employee turnover, which can offset the impact of those wages on the financial bottom lines of employers.

At the same time, if the national floor is set too high – well above worker productivity in various low-cost locations around the country – it will induce employers to hire fewer people or lay off some existing workers, which also should be morally or politically acceptable.

Ultimately, therefore, where to set the minimum wage is an empirical matter. What nationwide floor is the “goldilocks” level – enough to lift wages sufficiently toward or ideally at the poverty level, without an unacceptable decrease in employment?

Shortly before he died, one of the leading experts on the subject, Princeton’s Alan Krueger penned an op-ed in the New York Times in 2015 reporting the academic consensus (reflecting the average of all the numerous studies on the employment impact of various minimum wage levels) on this question: at $12 per hour, if phased in over several years, the net effects on employment would be minimal . Adjusted for consumer inflation since then, Krueger’s estimate today comes in around $13, also phased in.

Taking account of Krueger’s suggested phase-in, the recent proposal by West Virginia Senator Joe Manchin – the critical tie-breaking vote in the Senate – to raise the national floor to $11 per hour, indexed to inflation thereafter , is not that far off Krueger’s 2015 estimate. Manchin also has asserted that every Senator – Democrats and Republicans -- wants the national minimum wage increased above the current $7.25.

Even if he is right, it is not clear there is sufficient Republican support – in particular, 60 votes in the Senate to survive a cloture vote – to support the $11. But if there is, Democrats should take that deal – it’s much better than the status quo – as long as the floor is indexed, which should end the national minimum wage being a perennial political football. Of course, minimum wage politics can continue at the state and local levels, which is totally consistent with the federalist nature of our government and with varying labor market conditions and costs of living across the country.


The Lessons of Student Debt Continued: The Minimum Wage

By Bob Love

Many symptoms … one disease

“The so-called symptoms of disease are manifestations of an inherent principle of the organism to restore healthy function and to resist offending agents and influences.”

― Herbert M. Shelton, Getting Well

As you may recall, in The Lessons of Student Debt, we proposed that US student debt was just one among many seemingly unrelated sociological and ecological symptoms of an advanced and pervasive monetary cancer known as the Federal Reserve Banking System [FRBS]. We argued that the FRBS is using US$ [reserve] currency counterfeiting to levy a hidden tax on global wealth held as currency [including wages and savings globally] which falls regressively on global Labor as an economic class. As such we were reluctant to address unpayable US student debt as an isolated symptom without first properly diagnosing and prescribing a treatment for the underlying global disease … you don’t put bandaids on cancers.

For those of you who read the argument closely, you will also recall its claim that JM Keynes named the underlying disease “currency debauchment” in a linked attachment … to which we referred by its common appellation of “counterfeiting”.

A diagnosis and a super-symptom

Well, in another tense moment for American democracy, a new symptom … or rather a super symptom [that includes student debt] … is now in debate [again] among those same senseless bureaucrats who will decide the fate of US student debt: the US minimum wage. It seems a lot of families [even in America] cannot manage to “live” on their wages and savings these days … sound familiar? Maybe their toddlers should take out 70 year, government-guaranteed loans to cover daycare costs [with 3x square meals and transportation included] while the parents work multiple jobs to put a little fast food on the table and still pay the rest of the family’s bills including an FRBS-subsidized mortgage on the house [they could not otherwise afford] where the pets live and the people sleep? [Let’s think out of the box for solutions!]

Seriously, most Democrats [even those who campaigned on this] seem to agree with Republicans that an increase in the minimum wage [to address Labor’s increasing poverty] cannot be properly addressed right now in the promised bill authorizing another $1.9 trillion of new counterfeiting for emergency relief of the “temporary poverty” resulting from Covid.

But here’s a scary thought: what if these Democrats and Republicans are wrong? What if the “poverty” being faced by Labor and Small Business is neither temporary nor a result of Covid? What if this rising  poverty is systemic to FRBS-enabled and hidden-tax-funded crony capitalism as we previously argued? Fool me once, shame on you. But fool me twice, shame on me. [Again, to understand the link between Fed counterfeiting, crony capitalism and Labor’s impoverishment, go to the FROTH blog.]

Now almost anyone with a grain of common sense would at least suspect that non-living wages and unpayable student debts have a cursory relationship and possibly a common cause. In fact, as we argued, student debt [whether payable or not] is just one specific symptom of Labor’s general and worsening impoverishment. So with the issue of the minimum wage now coming into view, it is time to expand Keynes’ description of currency debauchment.

“The process [of currency debauchment/counterfeiting] engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. ...  [It] impoverishes many [while it] actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers,", who are the object of the hatred of the bourgeoisie [small business owners], whom the inflationism has impoverished, not less than of the proletariat [Labor].... By combining a popular hatred of [profiteers] with the blow already given to social security by the violent and arbitrary disturbance of the established equilibrium of wealth which is the inevitable result of [currency debauchment/counterfeiting], these Governments are fast rendering impossible a continuance of the social and economic order. But they have no plan for replacing it.”

Here Keynes properly elevates the diagnosis of “currency debauchment” by describing it as “systemic” and naming its super-symptom ... the “arbitrary rearrangement of riches” [which includes the rise of student debt]. This elevation is critical to connect the plethora of seemingly unrelated symptoms … such as minimum wages and student debts … which result from this single systemic cancer.

Your cancer is terminal … but we can offer you life support

“You know as well as we do that right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must."

― Thucydides

“It is easy to be conspicuously 'compassionate' if others are being forced to pay the cost.”

― Murray N. Rothbard

But Keynes goes even further and claims that the diagnosed cancer is sociologically terminal if untreated … in the sense that it renders normal life impossible without permanent “intervention” to provide “life support”.

This intervention is known as the “welfare state” … which some hate because they believe they are being forced to pay for it … and others love because they believe they are not. However, the welfare state is largely funded by the same hidden wealth tax on currency [ie. wages and savings] which ultimately funds every other fiscal deficit [federal, state and private] in the modern world. So you see, the “benefits” paid out by the welfare state to those on the very bottom of the heap [who cannot earn a living wage] are extracted equally from all Labor [employed or not] globally without discrimination. Who did you think paid for the welfare state?

Thus, a certain economist named Mises has argued [in Liberty and Property, Section 6] that Keynes’ “currency debauchment” always gives birth to a permanent “welfare state” precisely because it prevents Labor from earning a living wage. The welfare state merely redistributes poverty among the already impoverished … it never redistributes wealth. [Thucydides was right … the old folks usually are if you can wait long enough]. And the minimum wage [like student debt forgiveness] is just another form of life support by the welfare state.

Now who’da thought a little counterfeiting to make end$$$ meet could cause so many complicated problems for so many simple, unsuspecting, hard-working people?

The future of welfare … no work required

But the minimum wage is one of an old, tried and failed set of non-solutions that have never worked [no pun intended] to solve the myriad systemic problems arising from Labor’s impoverishment under crony capitalism … which is exactly why it has to be periodically “raised” … just “up the dosage” … “more is better” [even if it is not working] … right?

I travel through the Seattle airport district and recently, within months after the district passed a $15/hour minimum wage, McDonalds used low interest FRBS subsidized loans to purchase and install automated customer kiosks in all its area restaurants and to layoff the attendants [who could not afford to live in the district without rent controls anyway]. You get the idea. The welfare state is complicated … because it involves “centrally plan” an entire economy.

A higher minimum wage is just a bigger bandaid being proposed to treat a spreading cancer. And on this even progressive Democrats are in agreement [if you watch their actions instead of listening to their campaign lies]. Indeed some, like Andrew Yang in a shocking attempt to be honest in politics, have already moved on from the failed welfare policies of the past to propose a 21st century welfare state “life support” system called Universal Basic Income … no work required, just income for everyone [rich and poor alike so nobody feels stigmatized] … because they see the “handwriting on the wall” for Labor and the Middle Class under subsidized and robotized, crony capitalism … and you can’t have the wage-slaves dying on you … they are needed [for awhile?] to consume all the stuff the capitalists’ robots can produce.

So what about the minimum wage?

So, it seems, the questions of “student debt” and “the minimum wage” are not simple, isolated problems that can be “fixed” within the existing system after all. Both are symptoms which, if properly diagnosed, lead us back to the same massive and fatal systemic cancer [with even more generalizable symptoms for those patient enough to search them out] that will soon result in one of two things:

  • the official death certificate of Labor and the Middle Class or

  • putting them both on enhanced and indefinite “life support” [aka counterfeit $timulu$] in some future, exaggerated form other than isolated student loan forgiveness or minimum wage increases.

I, for one, have already made my peace and provision that I am not to be put on artificial life support … because that is not the way I wish to “live”. So I guess you already know where I stand on the matter of raising the minimum wage to address systemic poverty among the world’s working poor. Right?

  • First excise the monetary cancer.

  • Then “the system” will rapidly reform itself by common people using common sense to provide liberty and justice for all !!

PS. This cancer WILL be papered over with more counterfeit US$

We live in a period of rapid degeneration. By massively counterfeiting the US$ currency … the world’s reserve currency and thus the most basic social medium of information and exchange ... the FED has become THE “global super spreader” of sociological disease, disability and death to Labor and the Middle Class worldwide … and thus to the Family itself which is the only proven foundation for stable social structure short of slavery.

And yet, it appears increasingly clear day by day that the large majority of Americans can no longer imagine any alternative to the welfare state so long as the Fed’s “helicopter money” drops are direct deposits into their bank accounts … long term consequences be damned. They have learned all the wrong lessons from their suffering and must face their doom misinformed.

Any restraining notions of fiscal and moral responsibility are no longer politically or socially credible due to abuse by political parties and neglect by religious institutions. It appears the American mind must now face its own psychosis. There is no other option once a people has rejected its moral obligation to be intelligent.

 
To What Degree, This Debt?
 
Illustration: Thuan Pham

Illustration by Thuan Pham

As memory serves, Wichita State University’s Campus Activity Center, now the Rhatigan Student Center, housed an interesting oasis from the hectic college pace, where one could consume a beverage, chat with friends, read a book, or, as the name may have implied to those inclined, skip class? The Alibi provided all of that, and its name may be better defined by the actions of today’s students who are missing in action, not actually in class, nor faithfully logging into their virtual classes. What’s their excuse?

At most institutions of higher learning, admissions have dropped, a pre-pandemic trend that hasn’t been helped by Covid-19’s clearing of college campuses. Vocational/junior college options are growing in popularity, partly due to the ever-expanding cost of traditional colleges and universities. What was affordable in the 1970s has become almost out of reach in the 2000s. Student loan debt has easily surpassed credit card debt for many Americans as the #2 biggest item consumers will have to borrow money for during their lifetime, and houses are not far ahead of that trajectory for elite-diploma students, especially those in the medical field.

So what to do about that collective $1.6 trillion dollar debt load that students/parents are carrying? President Biden has stated that $10,000 forgiven per debt holder should become the federal government’s burden, nay, the taxpayer’s, en masse. Not attached to that idea? Here are some other proposals the administration is considering:

  • Limiting student loan payments to 5% of a person's discretionary income (income minus taxes and essential spending like housing and food) over $25,000;

  • Forgiving student loan debt for people who made payments for 20 years;

  • Granting $10,000 of undergraduate or graduate student loan relief for every year of national or community service, up to five years; and

  • Allowing the discharge of private student loans in bankruptcy.

When the Economics axis meets the Political one, we turn to independent voices, those who have crunched the numbers and also have attempted to influence their elected representatives. We need help to sort through that which we do not always have the time, nor the depth of knowledge to decipher. Not one, but two Bobs have volunteered to step into the ring and battle this complex topic to the best of their finely honed minds. Indeed, may the best ideas win!

Across-The-Board Student Debt Cancellation is a Bad Idea: Targeted Payment Relief is Far More Appropriate

By Robert Litan

Averages, by definition, conceal wide variations. One of the best illustrations is the famous statement by former Labor Secretary, Robert Reich, who is about 5 foot tall: “You know, Shaquille O'Neal and I have an average height of 6 feet.”

So it is with the quoted “average” student loan debt of $36,000, which may be a tad high. According to Forbes the average is about $32,700. Whatever the precise figure, student loan debt is distributed unevenly. As Kadija Yilla and David Wessel of the Brooking Institution have documented, only 6% owe 1/3 of the $1.6 trillion in total debt, while 18% of borrowers owe less than $5,000. Furthermore, individuals who owe the most tend to have borrowed monies for professional or graduate school that are pathways to higher-paying careers, while those who default most on their loans have lower incomes and have attended for-profit schools and community colleges.

In short, the student loan debt problem is very real for only a minority of borrowers, and any loan relief or forgiveness, as suggested below, should be limited to those most in need.

To be sure, the pandemic has made it more difficult for younger people who have attended college and financed it with debt, especially those who didn’t finish and have suffered greater job or income loss than college graduates, to stay current on their student loans.

President Biden proposed debt cancellation of $10,000 – assuming the Justice Department gives a thumbs up on the lawfulness of doing this by Executive action -- goes well beyond what is necessary to address this problem and has huge price tag: $373 billion as estimated by Utah professor Adam Looney, although well below the $1 trillion cost of cancelling all student debt up to $50,000.

To put the $373 billion cost in perspective, Looney notes that it is “larger than the amounts the nation has spent over the past 20 years on unemployment insurance, larger than the amount it has spent on the Earned Income Tax Credit, and larger than the amount it has spent on food stamps.” (emphasis added). Moreover, as Looney notes, the beneficiaries of a limited $10,000 across-the-board program on average “would be higher income, better educated, and whiter than beneficiaries of other transfer programs.”

More broadly, the notion that debt cancellation of any size would help close the overall black-white wealth gap, which is very real and which justifies other measures to help close it, is false. Duke University economist William A. Darity Jr. in a 2019 paper noted that “on the face of it,” a universal debt cancellation would appear to disproportionately benefit blacks because black students “hold a larger average amount of debt.” But he then went on to observe that college enrollment rates for whites exceed that for blacks, and once this offsetting factor is taken into account, “any difference in the mean [wealth] gap is imperceptible.”

If the objective is to minimize pandemic-related pain, then existing law already allows borrowers to defer their payments, without interest if the loan has a subsidized interest rate, for up to three years if they are experiencing hardship. If this deferral program is insufficient or not working for pandemic-related reasons, it could be modified, possibly by Executive action alone, to make clear that any job-loss or inability to obtain employment since the pandemic’s presence in the U.S. was clear (March 2020) counts as hardship.

Even a more generous $10,000 debt cancellation program can still be targeted, Looney suggests, on the basis of borrowers’ financial situation at the time they submitted at the time they sought the loan (which is on record at the Department of Education). Alternatively, the amount of cancellation up to the $10,000 maximum could be tied to a borrower’s current or recent average income, based on income reported to the IRS (provided borrowers assent to the Education Department accessing their tax filings).

As for larger amounts of loan forgiveness, the President noted in his town hall on February 16th that students who perform various kinds of public service – teaching, nursing, firefighting, serving in the military, and various kinds of non-profit work --can have their debt cancelled, which is already authorized under existing law. Under the Public Service Loan Forgiveness Act, signed into law by President Bush in 2007, the amount of debt cancelled depends on how long borrowers serve in one of these capacities. At a maximum, all federal student debt will be cancelled if a borrower serves 10 years in one of these jobs and has made timely payments for 10 years.

It would be appropriate, in my opinion, for Congress to relax the PSLF’s debt cancellation requirements somewhat, both as a matter of fairness, and as a way of enticing more people into necessary public service jobs.

In any event, debt cancellation is unnecessary for pandemic-related or other reasons for those borrowers whose loans are “income-contingent,” since their required payments already have been reduced by any pandemic-related loss of income, and any future payments are capped as a percentage of their income. Borrowers with fixed rate loans also under existing contracts can convert their loans to be income contingent.

At the end of the day, for those who believe, as I do, that the federal government should concentrate its limited resources over the longer run – after the short-term help to get us through the pandemic is no longer necessary – on those who are most needy, then are far more targeted and cost-effective ways of doing it than any across-the-board student cancellation.

For example, Utah Senator and former Republican presidential candidate Mitt Romney has proposed the Family Security Act, which would create a monthly cash benefit for families, with $350 per child up to age 5, and $250 for each child between ages 6 and 17. The Niskanen Center estimates that Romney’s legislation would cut child poverty by about 33%, immediately benefitting poor families and improving life prospects for their children. And it would be fully paid for through changes in the tax code (eliminating permanently the Child and Dependent Care Credit (CDCTC), head of household filing status, and the deduction for state and local taxes (SALT)) and repealing the current federal program (Temporary Aid for Needy Families (TANF)).

It has been reported that the Biden Administration is seriously considering this idea. Clearly, one of potentially many, ways for the Administration to work toward fiscally responsible, bipartisan measures that improve American life.

The Lessons of Student Debt

By Bob Love

The Problem

Beginning in the 1970’s, something began to erode the financial viability of the American middle class family supported by wages. First, mom went to work with dual-income families 

becoming the rule by 1980. Then by 1990, families realized that even with two wage earners, they could no longer find cash after household expenses to pay their childrens’ post-secondary tuition … even at state schools  and jucos. So they began to borrow to fill the gap and asked their children to borrow before they even had a job. ….  And just as parents were asking their kids to go into personal debt, Washington was [without asking] saddling those same kids with national debt to meet its otherwise unpayable social welfare obligations to those kids’ parents and grandparents … as well as its discretionary handouts to [soon to become TBTF bailouts of] the Military Industrial Complex, BIG OIL, BIG AG and many others that caused federal expenses to vastly exceed “tax receipts” [more on those later]. As they say, “ _hi_ rolls downhill” … and the kids were at the bottom of “The Hill” … and as a group of individuals they will never be TBTF [no matter how vital they are collectively to the future].

So, the kids went into debt for their post-secondary educations … and student debt soared into the trillions … because the same federal government that was already saddling these kids with national debt decided to make it easy for the kids to get into personal debt by “subsidizing” student loans [while making it impossible to get out of debt by excluding student loans from discharge in bankruptcy]. And although these “subsidies” took on numerous financial forms [public and private], they all “stimulated” spending on higher education which was only too glad to “take the money”, expand overhead/expenses and eventually raise tuition to “meet the demand”.

Then a funny thing happened … the graduates discovered it was nearly impossible to get married, have two incomes with kids needing childcare and education, incur the regular expenses for a household and pay down [much less pay off] their own student loans … the EXACT SAME PROBLEM THEIR POOR PARENTS HAD FACED TWO DECADES EARLIER … JUST DELAYED. Who’da thought?

This unanticipated new problem took Washington quite by surprise, because [as noted above] Washington [since the time of Alexander Hamilton] has never considered debts as things that need to be repaid. So some of the brighter minds in Washington conceived a radical, new solution to the problem … a progressive epiphany …  just FORGIVE THE STUDENT LOANS and make all education “free” so that nobody ever had to face this problem again. Sheer brillance !!!

But, of course, the debts will never be forgiven … just moved from the liability side of the students’ balance sheets to the liability side of Washington’s balance sheet [where they become theoretically “payable” by everyone as increases in the national debt] … but from there the loans are moved to the liability side of the Federal Reserve’s balance sheet where Washington hopes they can be “warehoused” [along with trillions in other national debt] until …  someday somehow “as a practical matter” … they “die of old age” in a snowballing financial ponzi scheme that makes Bernie Maddoff look like Les Miserables’ Jean Valjean when he robbed the little boy of one sou … a history lesson today’s students do not understand because the ECB and the Euro [like the Fed and the US$] have made certain nobody remembers [or dares to say aloud] the financial history and wisdom of the ages. And, by the way, education will never be “free”. This is all DoubleSpeak from the Ministry of Truth [for those students who read Orwell’s “1984”].

Those pesky taxes

Remember how we noted above that Washington was not collecting enough “taxes”. Well, as it turns out, since 1971 Washington has bridged its fiscal gap by having the Federal Reserve “counterfeit” US$ … what Keynes euphemistically labelled “debauching the currency”. I prefer to call it what it is … counterfeiting. They argue that it is legal … I say it is neither constitutional nor legal and I sued the Federal Reserve in 2015 in US Federal District Court in Kansas. My case is recorded in the blog FROTH.

In any case, counterfeiting ALWAYS impoverishes many [in this case Labor] to enrich a few [in this case Capital]. This depraved monetary policy explains why subsidized [crony] Capitalists could economize on Labor expenses so ruthlessly for so long … impoverishing Labor. As it turns out, the counterfeiting was a “hidden tax” on Labor in America and around the globe … wherever people got and held their wealth primarily in wages and currency … and all wages and currencies are tied to the counterfeited US$ [as the world’s reserve currency]. If/when you want to better understand these crimes read the FROTH blog for starters.

What to do now

OK” you say … “I agree with you. Labor has been robbed for 50 years. But what should we do now about student loans that cannot be paid?”  I understand your pain, but before I answer you, tell me this … “Which is worse, evil or ignorance?”:

“Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter—by peaceful or revolutionary means—into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.

“Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws! ... [for] instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. [This objective would demand more enlightenment than they possess.] Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.

“It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution—some for their evilness, and some for their lack of understanding.”

The Law, F. Bastiat, 1850

As a practical matter here are my proposals in order of importance … don’t skip steps:

  • Abolish the Federal Reserve banking system and force Congress to take back its exclusive constitutional duty to regulate the currency and the federal debt openly and transparently and to collect taxes without using counterfeiting to hide them.

  • This systemic change will unleash powerful and virtuous endogenous sociological processes that will rapidly restore America’s “metabolic equilibrium” [including middle class democracy] and in so doing address a plethora of social ills [beyond student debt] that are all common symptoms of the same underlying monetary/tax cancer.

  • Revoke all government liability for and guarantees of student loans … just as Nixon revoked the gold guarantees in the Bretton Woods Agreement in 1971 … [and listen for the screams from those who would abuse children for profit].

  • Permit students to discharge their student loans in bankruptcy like any other debts as they see fit … they are adults responsible for themselves and answerable to their communities.

  • Learn and remember to NEVER trust Washington again with our common currency unsupervised.

 
Data Gating
 
Illustration: Thuan Pham

Illustration by Thuan Pham

High stakes decision-making isn’t for the meek, so many factors weigh heavily upon those whose stroke of a pen, oral command, or click of the “Send” button launch humans into unknown territory, into consequences that only the best prognosticators can envision.

Many historical choices come to mind: Caesar’s crossing of the Rubicon (and those who later murdered him), Henry VIII’s divorce from the Roman Catholic Church, and Harry Truman’s order for the use of atomic bombs on Japan. What went through the minds of those making these premeditated decisions? What did those flow charts look like?

Experts believe that consideration of multiple variables, selective inclusion of those concerned, and careful implementation stages will provide acceptable outcomes, but no one believes everyone will be satisfied with directives that address complex issues, and that potentially affect billions of people. Certainly not when it pertains to our children’s well-being.

Educators across the globe are trying to scrutinize local data to determine what to do with students who are potentially disconnected from essential knowledge and skills that they would be gaining if sitting in a classroom, and with frustrated parents who need to be at work, and don’t remember the associative property of multiplication, or what happens when covalent compounds dissolve in water. Tensions are high as positive case rates are layered over cumulative incident rates while considering the impact of YLL, Years of Life Lost , while also battling the interests of teachers and unions: mathematical interpolation meets politics with the force of an Enhanced F5, bearing down on communities that are ill-equipped to cope.

One data analyst in Wichita offers a unique perspective on what schools should consider when evaluating whether or not to open doors to students. Joy Eakins has experienced Wichita Board of Education decision-making processes, and has been aggressively analyzing the data from which local, county, state, and federal agencies have been utilizing to provide direction to schools and parents during the Covid-19 pandemic. Here are some of her insights into this complex process.

Who’s Missing in the Discussion of School Gating Criteria?

By Joy Eakins

As a parent and a former school board member, one of the things I have watched with great interest this last year is the conversations our community is having around education and the role of public schools through the pandemic.

Central to many of those discussions has been the School Gating Criteria (SGC).  People often ask me what SGC is  – and the simplest answer is that the SGC is a set of measurements that help define the seriousness of the spread of COVID in a community.  The criteria are supposed help school leaders chart their course forward and communicate with stakeholders about the steps they will be taking.

In Kansas, the SGC proposed by the Kansas Department of Education are based on 5 metrics: student absenteeism, county positive case rates, county cumulative incident rates, trends in these incidents rates, and local hospital capacity.  Each of these metrics has a set of “gates” that determine what color that criteria is – green, yellow, orange or red.  For example, if the two-week test positivity rate is below 5%, then the color for that metric is green.  If it’s over 15% then it’s red. Once a final color determination is made, the SGC indicates what type of school activities will take place (in-person, hybrid or remote).

When you first read the SGC, it seems straightforward and simple to implement. But as they tried to apply it, the creators and users found several shortfalls that an effective data leader would have been able to predict and possibly prevent.  

For example, the criteria are each assigned a color – but there is no guidance on how to combine those colors and come up with a single color to guide school operations.  Boards and administrators saw times last fall where all 4 colors were represented on the rubric, and no one knew how to decide what color to assign.

Or what if the Trend in Rates is “Stable” for your county?  In the SGC, the rubric states “Stable” is both orange and yellow.  There is no guidance to explain how to choose here either.

With the Hospital Capacity metric, the data isn’t easily available, and the metric is confusing because it does not specify what kind of capacity should be considered – inpatient beds or ICU beds? And what if neither of those is the problem, but hospital staffing is?

I’ve documented additional issues with the SGC here, but the most glaring flaw is that the SGC only provides a picture of what is happening in the community at large – mainly to adults.  As it turns out, the CDC found “there is little evidence that schools have contributed meaningfully to increased community transmission.” And, children are not at a high risk for hospitalization or death by COVID. In fact, in Kansas, not a single child has died from COVID and nationwide, children aged 5-17 are 16 times less likely to die from COVID than the comparison group of 18-29 year olds.  (This is really astounding when we consider that those 85+ have a rate of death that is 630x higher than the same comparison group.) 

What the adopted SGC fail to show is how children are doing when they are not physically present in school.  And the data now coming out paints a dismal picture.  Researchers investigated the impact of closing elementary schools in the Spring of 2020 found “an estimated 13.8 million years of life lost (YLL)”  could be attributed to the closures, meaning that American children’s lives will be shortened by 13.8 million years collectively due to the loss of education last spring.  They also found that had schools been left open, taking into account the virus spread and death rates at that time, the YLL would have been less than the 13.8 million years lost. These YLL estimates do not include the impact due to high school dropout rate increases or the impact of closed schools for older children. So this number is likely an understatement of the price our children will pay for the Spring school closure. 

But the cost to students’ lifespan doesn’t end there. An estimated 57% of adolescents seeking mental health care receive it in a school-based setting, and 35% receive their mental health services exclusively in school.  Schools are so important in helping children get mental health care that new research is showing adolescents age 12-17 saw a 31% increase in mental health-related Emergency Department  visits and children age 5-11 saw a 24% increase last fall.  It stands to reason that closing schools impacted the ability of those students to receive care, exacerbated their mental health, and increases YLL.

Children’s physical health is also declining. As children sit longer in front of computer screens, researchers are reporting that the positive gain we’d made in addressing childhood obesity and healthy living are being lost. This, too, will have long term impacts on the lifespan of our children. 

And the impact to children is not equitable. Students who live in poverty are the least likely to have access to in-person school, technology, adequate internet, food, or adult supervision.

When Boards of Education meet to determine how much time students will spend in school, I would suggest they adopt indicators in their SGC that include the impact of remote and hybrid education on children, including

  • Reports on academic progress, for example the number of D’s and F’s for older students and progress indicators in math and reading for younger students.

  • The number of students dropping out in secondary schools.

  • The number of juniors and seniors in jeopardy of not graduating.

  • Student logins per class trended over time since the beginning of the school year and broken out by buildings and grades.

  • Enrollment trends over the school year.

  • Community indicators for children as they compare to the previous year:

    • Requests for mental health assistance

    • Suicide attempts

    • Crimes

    • Emergency Room visits

    • Overdose and drug related statistics

As school leaders look at this bigger picture, it will be easier to understand why the American Academy of Pediatrics advocates “all policy considerations for school COVID-19 plans should start with a goal of having students physically present in school.”  Leaders and communities should absolutely do what is possible to mitigate risk for the adults and address the burnout our teachers are facing.  At the same time, we need to realize that keeping kids in remote or hybrid learning is not just an inconvenience to parents as some union leaders have alluded.  These policies have catastrophic impacts on the health and lifespan of the next generation.