A Parable of Idiocy: The Chicago Teacher’s Strike

            Let’s pretend for a moment that you read a story in a newspaper. The story goes something like this: “Pleasant Valley Hospital doctors demands a 35% wage increase for their services at the hospital.” You skip down a few lines in the article and stumble upon this sentence: “The doctors at the Pleasant Valley Hospital have only had a 20% success rate with their treatments. They say that if their wage increase is granted, their success rate will probably go up.” What’s your response? It’s probably not sympathetic to the doctors, is it? More pay, for sub-par results? Yet that’s exactly what’s happening in Chicago.

            The average wage for teachers in the Chicago district is $71,000 or so, according to ABC News. That’s just shy of 75% more than the national average wage of $41,000, according to SSA.gov. Keep in mind, these teachers don’t work 12 months a year, but make a lot more than what most year-round workers make. There are a lot of underpaid and under appreciated teachers in the nation, but the teachers of Chicago aren’t in that group.

            What is more damning of this strike is the results of the teacher’s work: 79-80% of Chicago 8^th graders are not proficient in either math or reading according to the US Department of Education. ThinkProgress.org reports that the elementary schools in Chicago have a school day that is less than 6 hours long, and that many students attend 10 less days a year than the national average.

            Put it all in perspective, it looks like this: A Chicago teacher makes 73% more than the average worker, works fewer days than the average worker, and teaches a shorter class than other teachers. This teacher turns out students of whom 8-out-of-10 are ill prepared in the most basic subjects, and this same teacher is demanding a 35% raise which would pay them nearly $100,000 a year. Because the raise wasn’t granted, they ditched a third of a million children who desperately need education to pursue their own demands of “need”. This is sheer idiocy and why the entire strike is a sad and bitter joke about our educational system.

If the Chicago students were in the top one percentile it would be a pay raise based on the ability of the teachers to produce exceptional students. Even that makes sense for $100,000 a year—being the best teachers and producing the best students anywhere. But there are far better teachers making far less money in other states, and turning out far better students. I should know…I sat in their classrooms. Education News reports the average pay for our local college instructors is $53,000 a year—and they’re grateful for their jobs…unlike some people.

…you stay classy Chicago.

National Debt: the d'Anconia Perspective

"An honest man is one who knows he can't consume more that he has produced." -- Francisco d'Anconia

            I’ve been mulling this line over in my head for the last few days as I’ve been reading and writing and thinking through an essay I’ve been working. In light of recent events (which I’ll name in a moment), I’d like to suggest something: Debt is consumption above and beyond what one currently produces.

Debt is the act of borrowing additional consumption against current or anticipated future production. It is based on the fact that current production is not producing enough for current consumption. This might be a positive action in some cases, or at least acceptable premise to work with. For instance, homeownership is usually funded through debt—because it is rather difficult to come up with $150,000 on the spot when purchasing a house. Thus, funds are borrowed in anticipation that the house will gain value as the homeowner pays down his loan.

Another acceptable case might be a small business that uses a loan to create additional production. If the demand for production increases, a loan is one way a business might use increased future production against current business consumption. The current business consumption does increase—but it does so to increase production, and the business owner banks that her increased production will exceed her needs to pay off her loan. She anticipates that her loan will result in production that pays her back far and above the cost of her loan payments and interest.

In either of these cases there is an end to the means. The homeowner is looking for a return on his debt-funded investment by means of increased value and equity in his home. The business owner is looking for increased sales and funds as a direct result of her business loan. Personal beliefs aside for a moment, there is legitimate rationalization for both these cases. One other case might involve hospital bills or other emergencies of that nature, but that’s a different category altogether.

However, the rationalization for debt stops there. Much of the debt/credit card mentality is based on a “want” today that is fulfilled against this month’s production. The “want” does not increase production, short term or long term. Worse, the phrase, “I’ll pay it off someday” is justification used for an expenditure today that is funded through the production of “someday”. There are no immediate plans for “someday”, only the hope that future production will outweigh today’s “must-haves”. There is no business calculation of return on investment, only the justification that “we have to have it” and “we can afford the payment”. Ironically, being able to afford the payment and being able to afford the item are two different things all together.

Fortunately, the private sector is starting to “get it” as credit card usage is currently dropping. Unfortunately, the public sector is going the opposite way. The event I mentioned earlier happened on the 4^th of September: the national debt clock rolled over $16 trillion dollars in debt. We have become a nation that is funding current pork against wishful thinking. If the debt counter were to slow down, stop, or even go down it would be one thing, but our national debt has more than doubled in four years. What have we to show for it? A car company the majority didn’t want, a healthcare mandate that the majority didn’t want, and increased ties to China that the majority didn’t want. Like a teenager with a credit card, we can’t seem to remember where all the rest of that money went, and it’s no wonder: we have no budget to tell us. Yet every household in America now effectively owes the world over $130,000—yet without significantly increased production to answer the debt.

“Oh but we don’t owe the money—the government does!” The answer to this simple naivety is in the question: where does the government get its money? From it’s citizens. What the government spends, the citizens pay.

“Oh but the rich…” Ahh yes, the rich. The IRS reports that that richest 1% pay 40% of all of the income taxes in the country, and the top 25% pay 86% of all the taxes. The top half of our society pays 97% of all the income taxes. How much more can we tax, and who else is left? More isn’t the answer.
            The truth is that if every American—all 300 million, rich and poor—gave every dollar they had to the US Fed to pay off the national debt, as of today they’d be $13 trillion dollars short. That’s a far cry from being paid off, or even caught up. At current spending rates, the theoretical $3 trillion an almost irrelevant payment.

            At the end off all this lies a simple truth: we don’t make enough, we don’t have enough, and we cannot tax enough to keep up with our debt. Francisco d’Anconia would say that our consumption has far exceeded what our ability to produce can support. That’s pretty damning evidence against the big spenders of both parties, who worsened the financial mess the country has seen following the 2008 elections. There is only one answer: stop spending. What we have is a spending problem that makes a drunken sailor look like a frugal housewife. Keep that in mind this November.