The Changing Dollar Differential Does Not Mean a Bad Economy

Earlier this month I posted about the US Dollar’s relative weakness against other currencies. Thomas E. Nugent says in this NRO article that the dollar has not actually weakened. Rather, other currencies are gaining strength due to the rise of capitalism in many parts of the world. Nugent shows how the relative value of the dollar to these other currencies is not harming the US economy.

Well, isn’t it at least bad that other currencies are gaining on the dollar? It is if you travel abroad or if you buy goods from nations with stronger relative currencies. But for the most part, this leveling of the global currency market is a good thing, Nugent argues. While there have been times that a weak dollar has accompanied major economic problems, Nugent says the in the current environment “certain benefits flow to, not from, the United States.”

“For example, the “dollar differential” is benefiting exports and suppressing imports. More people are working because of rising export demands. And countries with booming economies — where standards of living are on the rise as a result of imports that both cost less and help contain inflation — welcome those imports.”

In other words, the strengthening of other currencies against our dollar is not wreaking havoc. Rather, it is beneficial in many ways. Nugent writes, “Investors shouldn’t mistake a booming global economy for a weak dollar.”

War and Moral Authority

A few months ago I discussed the concept that the US tends to fare well in wars that are officially declared by Congress, but tends to fare poorly in wars where we avoid a formal congressional declaration of war. Even when I wrote this, I felt that this conclusion was inadequate and that further exploration was needed.

It should be noted that Article 1, Section 8 of the Constitution states, “The Congress shall have Power … To declare War, … and make Rules concerning Captures on Land and Water ….” But nothing in the Constitution or in US law specifies how Congress must exercise its power to declare war. Many insist that a declaration of war requires Congress to pass a bill that formally uses such terms in its title, but this is purely opinion rather than a matter of law.

According to Infoplease, the US has engaged in 21 notable military conflicts. Some of these could perhaps more appropriately be classed as domestic struggles. Using the (legally unsupported) strict interpretation of declaration of war, it appears that Congress only formally declared war in five of these: the War of 1812, the Mexican-American War, the Spanish-American War, WWI, and WWII. It may be argued that a declaration of war was implicit with respect to the American Revolution and the Civil War. The US pretty much prevailed in these conflicts, except for the War of 1812.

That leaves 14 other conflicts. It may be argued that Congress technically declared war in at least some of these. Looking through the list, I’m not sure that it can be argued that these conflicts were altogether unsuccessful. Vietnam and the Bay of Pigs were debacles, to be sure (probably unnecessarily). But success needs to be measured on a sliding scale in the other conflicts listed. Some were more successful and others were less so.

Many decry the Korean War as unsuccessful, but without it, three generations of South Koreans would have lived like their former countrymen in the great worker’s utopia of North Korea. The brief Grenada conflict was tiny, but was a significant turning point in the Cold War and in the USSR’s plans to expand into the Americas. We’ve still got troops in the Balkans following the conflicts in Bosnia and in Kosovo.

The Hoover Institution’s Shelby Steele postulates a different view of US military conflicts in this WSJ article. He argues that much rests on the concept of moral authority. Some of our wars have been wars of “national survival,” while others have been “essentially wars of choice.” Steele calls these latter types of wars “wars of discipline” that are “more a matter of urgent choice than of absolute necessity.” The reasons for choosing to fight these wars are more “abstract.” Choosing not to fight them would not immediately imperil our national survival.

Wars for national survival necessarily carry with them the weight of moral authority. In these wars, we don’t worry much about political correctness because “we fight to achieve a favorable balance of power,” Steele writes. “We fight unapologetically for dominance, and we determine to defeat our enemy by any means necessary.”

Conversely, wars of discipline are fought “to preserve a favorable balance of power that is already in place in the world.” Steele writes, “We fight as enforcers rather than as rebels or as patriots fighting for survival. … We don't sacrifice blood and treasure for change; we sacrifice for constancy.”

It can certainly be argued that wars of discipline are fought to prevent us from having to fight wars for survival. But this is often a hard sell. Steele explains, “When survival is at stake, there is no lack of moral authority, no self-doubt and no antiwar movement of any consequence. But when war is not immediately related to survival, when a society is fundamentally secure and yet goes to war anyway, moral authority becomes a profound problem. Suddenly such a society is drawn into a struggle for moral authority that is every bit as intense as its struggle for military victory.”

Steele explains where wars of discipline leave us:

“America does not do so well in its disciplinary wars (the Gulf War is an arguable exception) because we begin these wars with only a marginal moral authority and then, as time passes, even this meager store of moral capital bleeds away. Inevitably, into this vacuum comes a clamorous and sanctimonious antiwar movement that sets the bar for American moral authority so high that we must virtually lose the war in order to meet it. There must be no torture, no collateral damage, no cultural insensitivity, no mistreatment of prisoners and no truly aggressive or definitive display of American military power. In other words, no victory.”

I think the major difference in the Gulf War is that we had moral authority because we went to war to fight for a small ally nation that was unable to defend itself after it had been invaded by a despotic neighbor. We went in, kicked the Iraqis out of Kuwait, and then quickly scaled back to maintenance mode. The public is often supportive at the beginning of a disciplinary war effort. This support quickly wanes for the reasons Steele mentions. There simply wasn’t time for that transformation to occur in the Gulf War.

It has often been argued that had we gone on to Baghdad and deposed Saddam in 1991 instead of pulling back, we’d not have had to go through the last several grueling years in Iraq. This is a shortsighted analysis. We would still have gone through grueling years, but they would have occurred 12 years earlier. It’s not possible to go back and project what the domestic and international political scene would have been like had we deposed Saddam in 1991.

My assessment of this is that Americans are willing to commit lives, time, resources, and even personal freedom to a war for survival. You can get plenty of support for a disciplinary war, but only in the short run. You can get away with it if it’s targeted and short. But disciplinary wars that drag on tend to lose the support needed for success.

When it comes to Iraq today, Steele contends, “our great military might is not enough to compensate for our weak sense of moral authority, our ambivalence.” But the vast majority of Americans are not ambivalent when it comes to “Our broader war on terror,” which “is a war of survival.” While Iraq may ultimately “prove to be a far more important war in preserving a balance of power favorable to America than our war against al Qaeda,” Steele says, support necessarily wanes when we get too far afield from our primary objective, where our moral authority lies.

This scenario makes the current political waters very difficult to navigate. On the one hand, Americans are quite deeply committed to fighting terrorists that threaten our survival. On the other hand, they are ambivalent about our support of disciplinary conflicts undertaken to collaterally support the main goal. Still, Americans prefer to win in disciplinary wars, if it can be accomplished soon and decisively. But if not, they’re not very enthusiastic of efforts to simply maintain the status quo.

How is a politician to come across as tough on terrorists, while addressing concerns about conflicts where we lack moral authority? Anything you do can seem off base, depending on how it gets spun. Anti-war statements come across as being weak when it comes to terrorists. Pro-war statements can seem like war-mongering and overreaching. Saying we should get out of Iraq can seem like a commitment to defeat. Saying we should do what it takes to get the job done in Iraq may be taken as a sign that you want to keep fighting there ad infinitum. And fickle public opinion varies daily and varies by location. It’s a tough season to be running for national office.

C.S. Lewis on War, Punishment, and Loving Others

By any account, C.S. Lewis was a remarkable individual. A bright scholar, Lewis abandoned religion in his mid-teens. In his early 30s, he finally “gave in, and admitted that God was God, and knelt and prayed....” Later with encouragement from fellow Oxford professor, JRR Tolkien, Lewis became a Christian. (Lewis became a professor at Cambridge after three decades at Oxford.) Lewis is the author of numerous books, including nonfiction, fiction, and poetry. His strong stance as a Christian apologist continues to make him a lightning rod for anti-religion and anti-Christian critics, nearly four and a half decades after his death.

One of Lewis’ hallmark books is Mere Christianity, which is based on a series of radio lectures delivered in the UK during the Second World War. Lewis portrays Christianity as a demanding multifaceted religion that is difficult for anyone to swallow whole. He writes that “every one is attracted by bits of [Christian doctrine] and wants to pick out those bits and leave the rest” (p. 81). Lewis also notes that people have a tendency to twist various points of doctrine and/or take them out of context to support their personal philosophies.

Chapter 7 in Mere Christianity is titled Forgiveness. However, the major point of the chapter is what it means to love our fellowmen, a point about which Lewis believes many people have mistaken ideas. He notes that each Christian is commanded to love others as he loves himself. He then asks (p. 105), “Well, how exactly do I love myself?”

Lewis responds, “Now that I come to think of it, I have not exactly got a feeling of fondness or affection for myself, and I do not even always enjoy my own society. So apparently “Love your neighbor” does not mean “feel fond of him” or “find him attractive.” … Do I think myself a nice chap? Well, I am afraid I sometimes do (and those are, no doubt, my worst moments) but that is not why I love myself. … Go a step further. In my most clear-sighted moments not only do I not think myself a nice man, but I know that I am a very nasty one.”

After a discussion on how one can love the sinner and hate the sin, Lewis says, “Christianity does not want us to reduce by one atom the hatred we feel for cruelty and treachery. We ought to hate them.” But because Christianity concerns itself with the eternal soul, we are to want (and even work for) the eternal best for each and every individual, no matter how reprehensible that person may seem.

But what about the frequent claim that Christians are required to be pacifists? This view purports that there is virtually no legitimate instance in which war or capital punishment is warranted in Christian theology. Lewis bluntly disagrees with this point of view.

“Does loving your enemy mean not punishing him? No, for loving myself does not mean that I ought not to subject myself to punishment — even to death. If one had committed a murder; the right thing to do would be to give yourself up to the police and be hanged. It is, therefore, in my opinion, perfectly right for a Christian judge to sentence a man to death or a Christian soldier to kill an enemy. I always have thought so, ever since I became a Christian, and long before the war; and I still think so now that we are at peace. It is no good quoting “Thou shalt not kill.” There are two Greek words: the ordinary word to kill and the word to murder. And when Christ quotes that commandment He uses the murder one in all three accounts, Matthew, Mark, and Luke. And I am told there is the same distinction in Hebrew. All killing is not murder any more than all sexual intercourse is adultery. When soldiers came to St. John the Baptist asking what to do, he never remotely suggested that they ought to leave the army: nor did Christ when He met a Roman sergeant-major — what they called a centurion. … War is a dreadful thing, and I can respect an honest pacifist, though I think he is entirely mistaken. What I cannot understand is this sort of semipacifism you get nowadays which gives people the idea that though you have to fight, you ought to do it with a long face and as if you were ashamed of it. It is that feeling that robs lots of magnificent young Christians in the Services of something … which is the natural accompaniment of courage — a kind of gaity and wholeheartedness.”

But Lewis warns that it is vitally important that we remove any notion of revenge or hate from our hearts as we carry out necessary duties. “We may kill if necessary, but we must not hate and enjoy hating. We may punish if necessary, but we must not enjoy it. … Even while we kill and punish we must try to feel about the enemy as we feel about ourselves — to wish that he were not bad, to hope that he may, in this world or another, be cured: in fact, to wish his good.” Lewis admits that ridding oneself of feelings of revenge and hatred is a difficult task that may require a lifetime.

The Christian concept of loving one’s neighbor necessarily means “loving people who have nothing lovable about them.” Lewis says we love ourselves, not because we are lovable, but “simply because it is yourself.” He admonishes, “Perhaps it makes it easier if we remember that that is how [God] loves us. Not for any nice, attractive qualities we think we have, but just because we are the things called selves.”

I very much enjoy Lewis’ writings. I don’t always agree with him, but I often find his writings useful and frequently find them inspiring.

I'm Thankful for America

I have much for which to be thankful this Thanksgiving season. Oh, there’s always plenty to gripe about. But, take my word for it, whining simply isn’t as fulfilling as being grateful.

The irrepressible Mark Steyn discusses the American uniqueness of Thanksgiving in this NRO article. Steyn writes, “Americans should, as always, be thankful this Thanksgiving, but they should also understand just how rare in human history their blessings are.”

Of course the pessimists among us feel that the sheer fact that we enjoy such rare blessings is ample cause for self-flagellation. Steyn has a different take. He says that the USA is “is one of the oldest settled constitutional democracies on earth, to a degree “the Old World” can barely comprehend. Where it counts, Americans are traditionalists.”

Steyn recounts with his trademark irreverent humor how short-lived most other constitutional democracies in the world actually are. Then he accurately notes, “The U.S. Constitution is not only older than France’s, Germany’s, Italy’s or Spain’s constitution, it’s older than all of them put together.” Of course, many of us think our Constitution is in grave danger of being marginalized. Steyn doesn’t dismiss this when he writes:

“I don’t believe the U.S. Constitution includes a right to abortion or gay marriage or a zillion other things the Left claims to detect emanating from the penumbra, but I find it sweetly touching that in America even political radicalism has to be framed as an appeal to constitutional tradition from the powdered-wig era. In Europe, by contrast, one reason why there’s no politically significant pro-life movement is because, in a world where constitutions have the life expectancy of an Oldsmobile, great questions are just seen as part of the general tide, the way things are going, no sense trying to fight it. And, by the time you realize you have to, the tide’s usually up to your neck.”

I realize that it’s vogue among the elite and the Left to detest the USA nowadays, but I agree with Steyn when he says we should be highly grateful for our nation. Not only should we be grateful for it, but “on this Thanksgiving the rest of the world ought to give thanks to American national sovereignty, too. When something terrible and destructive happens — a tsunami hits Indonesia, an earthquake devastates Pakistan — the U.S. can project itself anywhere on the planet within hours and start saving lives, setting up hospitals and restoring the water supply.”

Steyn also argues in favor of using military might to achieve good, when he says, “If America were to follow the Europeans and maintain only shriveled attenuated residual military capacity, the world would very quickly be nastier and bloodier, and far more unstable. It’s not just Americans and Iraqis and Afghans who owe a debt of thanks to the U.S. soldier but all the Europeans grown plump and prosperous in a globalized economy guaranteed by the most benign hegemon in history.”

Former Senator Daniel Patrick Moynihan (D-NY) suggested that it is possible to love America, even while acknowledging her imperfections.

“Am I embarrassed to speak for a less than perfect democracy? Not one bit. Find me a better one. Do I suppose there are societies that are free of sin? No, I don’t. Do I think that ours is on balance incomparably the most hopeful set of human relations the world has? Yes, I do. Have we done obscene things? Yes, we have. How did our people learn about them? They learned about them on television and in the newspapers.”

The USA is far from perfect. But on this Thanksgiving, I agree with Mark Steyn and Senator Moynihan that she is a grand country. And I am exceedingly grateful for how blessed my life is because of her.

A Less Ethically-Challenged Future

Father Thomas Berg of the Westchester Institute for Ethics & the Human Person reports in this NRO article on the recent stunning findings that the benefits of embryonic stem cells can be derived from adult human skin cells. Moreover, these cells are “patient-matched.” Since the cells originate with the recipient, there is little risk of rejection by the immune system.

Researchers have been able to reprogram normal adult human skin cells by introducing genetic factors that cause them to become “essentially equivalent in versatility to human embryonic stem cells.” One scientist called this development “the biological equivalent of the Wright Brothers' first airplane” (see AP article). Berg’s mention of future possibilities almost sounds like science fiction: “[The cells] could then be used to grow tissues for future use in tissue replacement therapies (everything from regeneration of damaged heart tissue to Parkinson's to spinal-cord injury).”

While Berg seems excited about the scientific and medical potential of this new method, he returns to his strong pro-life roots in his assessment of its meaning. He writes, “Most importantly, there would be no embryo created, destroyed, damaged or used in any way at any point in the process.”

Since LDS doctrine approaches the beginning of human life differently than does the doctrines of the Catholic Church and many Evangelical churches, some Mormons have been ardent supporters of embryonic stem cell research. The fact that human embryos are destroyed in the process, for example, hasn’t dissuaded Senator Orrin Hatch (R-UT) from enthusiastically supporting government funding of it.

Other Mormons have just as ardently opposed embryonic stem cell research. Mitt Romney, for example, says he was favorably disposed toward this research until, as Governor of Massachusetts, he met with supporters of legislation that would have provided state funding for it. At that meeting, Romney says he realized that there was no logical or ethical limit to how far they would go in destroying human life in the pursuit of ‘scientific good.’ He vetoed the legislation and has been the only serious presidential candidate that has promised to do the same at the federal level.

At any rate, it seems that the recent findings about somatic cell reprogramming will soon deflate the entire embryonic stem cell debate. Serious scientists in the field, including the guy that is considered the father of embryonic stem cell research, now say that reprogramming adult cells is where the field is headed. There will soon be no looking back.

For those that are concerned about the ethical dilemmas of destroying human embryos, President Bush deserves thanks for standing steadfast on this issue. If not for his singularly stubborn refusal to permit new federal funding of research that would destroy human embryos, millions of taxpayer dollars would have already created a client class of research organizations that would be reliant on looking for solutions only within this limited arena. It may even be that the president’s immovability on this issue created a climate that caused researchers to branch out and ultimately find a scientifically and morally superior solution.

Father Berg hails “the intellectual honesty and scientific acumen” of the researchers that helped to develop the new cell reprogramming method. He writes, “The best part, of course, is that, for advocates of embryonic-stem-cell research, as well as for those opposed to embryo-destructive research, and especially for those millions of potential beneficiaries of stem-cell related therapies, the advent of the age of somatic cell reprogramming marks an enormous victory for all of us.”

Letting Kids be Kids

After four boys, raising a little girl is different. I grew up with four brothers and no sisters. My poor mother didn’t get daughters until she had daughters-in-law and granddaughters. My wife has had to indoctrinate me about the female aspects of matters.

My beautiful little daughter is far from dainty. She’s pretty much as rough-and-tumble as any of my boys. But she does like to put on nice dresses and have her hair done nicely for church and formal events. (Mind you, she doesn’t like the process of getting her hair done, but she does like the result.) She especially likes “twirly dresses” that float beautifully when she twirls around.

One of the things that is different about having a little girl is that it’s hard to find modest clothing for her at stores. Many of the clothes available for preschool girls appear to come from the Playboy collection. There seems to be an earnest effort in our society to sexualize little girls.

When I see young children dressed in a provocative manner, it just chaps my hide. I fume inside and wonder what their parents are thinking when they dress them that way. Do we have to devalue their souls in the pursuit of imitating pop culture young women whose lives are in shambles? Can’t we let little girls have their childhood?

It’s not just clothes, either. Society works on many levels to sexualize young girls. Parents are encouraged to buy dolls that look like Las Vegas street walkers for their girls. We have whole product lines of dolls that look like little girls dressed in gear from the local sex shop. And we have cartoons and video games that go along with those products.

Among a recent spate of books that decry the oversexualization of young women in American culture is a book called Prude: How the Sex-Obsessed Culture Damages Girls (and America Too!) by Carol Platt Liebau. I heard an interview with Liebau on the radio, which makes me interested in buying and reading the book. As one Amazon reviewer writes, “The book's premise [is] that our culture's oversexualization has caused young women to believe that sexiness trumps intelligence and character….”

Authors of several other books in the same vein were recently members of a panel discussion at the Ethics and Public Policy Center on the topic of modesty. Emily Karrs reports on the discussion and offers some of her own insights in this NRO article. The panelists agreed that our girls are stuck in a system where parents and institutions do a lousy job equipping them for the real issues they face with respect to sexuality, and more importantly, with respect to love.

One of the popular themes pushed at our young people is to go to the “extreme.” We’ve got extreme sports, extreme candy and drink flavors, and even extreme dinosaurs (in the Dec. edition of National Geographic). We’re also raising a generation where extreme self-centeredness is encouraged. People with this kind of ethic disdain love and commitment, which they view as distractions. As Karrs writes, they “prefer to stick to the emptiness of playing the hookup game in lieu of maintaining a 24/7 relationship….” It doesn’t take much imagination to jump forward four decades to see what kind of life this path will lead to.

As a certified overprotective dad, I want my little girl to have a childhood without having to worry about whether her clothes are tight enough and/or low-cut enough. I want her to be a kid, not some mini slut. And I want her to develop healthy attitudes about love, intimacy, and family. It seems that popular culture is at odds with what I want for my daughter. I’m grateful for parents and institutions that refuse to abandon our young people to the emptiness of the pop culture.

Creating Sacredness

A few months ago I read this Pew Foundation forum discussion with Richard L. Bushman, who is one of the foremost scholars on Mormonism. It was a broad ranging discussion that focused on whether Mormonism is compatible with democratic principles. During the discussion, Bushman made some comments about sacredness that I felt were quite profound.

Responding to a question about “secret doctrines,” and matters pertaining to LDS temples, Bushman says:

“This goes along with this "secret life" of Mormons. Sally [Quinn], you were referring to that earlier. What do they do when it comes down to it? Do they shun people and beat them up and so on? That has always been part of the story of Mormonism – you know, the "hidden horrors" of Mormonism – these advanced doctrines, and then the temple, because Mormons insist on saying it's sacred, not secret – but it is secret. Mormons do not talk about what goes on in the temple outside the temple, even to each other. Inside the temple they will talk about it, but not outside. There will be glancing allusions, but never a full-fledged description.

“The way I put it comes out of a conference we held when the Manhattan Temple was dedicated in 2004. We wanted to have a scholarly conference to mark that occasion, so we got Jonathan Z. Smith, a very distinguished scholar of ancient religion, and others to come, and we talked about it. Smith talked about how we call this a sacred space. How do you define a sacred space?

“That's a very interesting question: How do you create a sacred space? The theme of the conference was, how do you do it in the modern city, where there are all sorts of groups? Just like time is set aside on the Sabbath devoted to God, can you have space set aside that's devoted to God? Mormons have become very good at that. Before you can go to the temple, you can't simply be a member of the church. You have to see your bishop. Every two years you have to talk with your bishop who will ask you a set of questions. Are you committing adultery? Are you honest in your dealings with people? Do you believe in God and Christ? And so on down the list. It's a worthiness interview, and you have to have a recommend to get past the front door of the temple. Once you get past that door, you immediately go to a changing room where you shed your outer clothes and put on special white clothing. In the temple you speak in whispers. You don't speak aloud. And then outside the temple you don't talk about it at all. Some people think of this as secretive in the sense of hiding things. But for Mormons, it's all part of the process of creating a sacred space. When you walk in there, life is different. You just feel things are on a different plane.

“When you come out, it's not usually an overwhelming vision you have experienced, but you feel elevated. It becomes very important for Mormons to go into that space, just like practicing the Sabbath, keeping it holy, has an exalting effect on human life. So that's the way I look at the temple ceremonies.

“Mormons know you can go online, get every last word of the temple ceremony. It's all there. So it's not like it's hidden from the world. Anybody can get it. But among us, we don't talk about it that way. It means something to us. It means a lot.”

In modern life we are continually surrounded by and barraged by the profane. There is an earnest push to remove any hint of sacredness from public life — and from private life. Surely individuals and society could benefit from moments of sacredness. Elder D. Todd Christofferson taught (here) that gaining an appreciation of holy things helps fight cynicism and despair. Studies have shown this to be true.

How do we go about gaining a sense of the sacred and creating sacred spaces and experiences? I think Bushman has some good advice. For those that believe in the Bible, “practicing the Sabbath [and] keeping it holy” can have “an exalting effect on [your] life.” How often do we really “practice” the Sabbath in a way that makes it holy — in a way that exalts us? What Sabbath practices are beneficial in helping us make the day sacred?

Many in our world treat sacred matters profanely, and that’s not going to change. But I find great substance in the final words of Bushman’s quote above. It resonates strongly with me when he says, “It means something to us. It means a lot.” When something is deeply meaningful, we treat that matter in a manner that denotes how meaningful it is. We treat it with profound respect. Is that how we approach our worship? Is that how we approach the Sabbath? For Christians, is that how we approach the Sacrament of the Lord’s Supper?

Some will claim that treating matters as highly sacred is nothing more than a way to avoid critically examining them. It certainly can work that way, but it does not have to. Erudite religious people feel that they are including factors from a higher plane in their critical analysis — factors that are not readily or properly handled outside of a sacred setting. The feelings Bushman talks about are very real, but they are difficult to explain to others. They must be experienced.

LDS Church leaders often teach that the home should be one of the most sacred spaces on the face of the earth. For example, Elder Boyd K. Packer said (here), “Temple. One other word is equal in importance to a Latter-day Saint. Home.” What do we do to make our homes sacred spaces?

New Testament doctrine also suggests that we should make our bodies sacred spaces (1 Corinthians 3:16, 1 Corinthians 6:19). How do we go about doing that? How should this impact our attitudes about our physical bodies and about how we regard others’ physical bodies?

Elder Christofferson offers a number of additional questions and observations at the link referenced above. He offers suggestions as to why he believes that some matters considered by some to be insignificant are vitally important to our spiritual welfare.

I think that questions related to how we achieve sacredness in our lives are important, and that we should regularly pose them to ourselves. I think that answering them earnestly and then working to follow where those answers lead can yield tremendous benefits.

Education Tax Credits Follow-Up

A couple of months ago I posted about how to fund school choice. I specifically mentioned a four-part series (1, 2, 3, 4) by Adam B. Schaeffer of the CATO Institute. Schaeffer argued that vouchers were not the best tool for school choice and showed why he believed that education tax credits were the best way to go.

In my post, I questioned how much education tax credits could help poor families.

“While allowing businesses to offer scholarships probably answers some of this, tax credits seem to favor those that pay more taxes, which happens to be those that make more money. A tax credit of up to $4000, for example, wouldn’t be very helpful in paying for private schooling if your total state tax assessment (and therefore your total credit) amounts to $400. And if you’ve got three or four kids, the disparity only gets worse. Schaeffer seems to completely ignore this problem.”

A couple of days ago, I was surprised to receive a personal email from Schaeffer, where he said:

“I just wanted to write you about your primary concern about tax credits, that they cannot serve lower-income families sufficiently. I see that I should emphasize this more in the future, but donation tax credits are fully capable of supporting lower-income children and help those on the margin in terms of income by supplementing their personal tax credits. These donation credit programs have been the most popular in recent years . . . PA has a fairly large program that helps thousands of low-income children. If the programs weren’t capped at such low amounts, they would be able to cover all children who need the support.”

I very much appreciate Schaeffer taking time to personally write me to address this issue.

The Federal Happiness Code

I was rather disturbed by this NYT editorial promoting direct government intervention to make people happy. GMU economics prof Don Boudreaux had the following to say about it (here):

“Here's the scariest line I've read in ages: "The era of laissez-faire happiness might be coming to an end. Some prominent economists and psychologists are looking into ways to measure happiness to draw it into the public policy realm."

“Several decades ago, many economists - enamored of their increasing ability to describe statistically existing patterns of production - fancied that a new age was dawning in which government would improve the lot of ordinary people by substituting its own production and distribution "plans" for the results of the market. These fancies proved to be dangerous fantasies. We would all be much better off -- happier, even! -- if this new generation of planners are laughed out of the public arena before their power grows to be as large as their gargantuan arrogance.”

These kinds of efforts always start with the best of intentions. Eventually you’d wind up with the happiness police. One of Boudreax’s readers responds, “Implicit in unhappiness, as defined by the Times, is the envy we feel toward those who have more than we do (with an interesting implication that the wealth must be making them happy).” The implication is that more wealth transfer programs would increase happiness.

The opening paragraph of the NYT editorial employs a logical fallacy to compare protecting life and liberty of citizens with making citizens happy. The entire editorial is then based on this fallacy. The Declaration of Independence does not imply that government can or should in any way make people happy. Rather, “the pursuit of Happiness” is among “certain unalienable Rights” with which “all men” are “endowed by their Creator.” The Declaration does state that it is the job of government “to secure these rights” by the “consent of the governed.”

While the Declaration cites God as the author of our “unalienable Rights,” it does not imply that even God can make us happy. Government can and should ensure that it does nothing to abridge our right to pursue happiness. In fact, if the government does infringe on that right, the Declaration suggests that it is high time to refuse to be governed by that institution.

Government can protect our right to pursue happiness, but it can do nothing to make us happy. As I frequently tell my children, happiness comes by individual choice. You choose to be happy or not. Nobody can do that for you.

To assume that the government can make you happy is to assume that a satisfactory definition of happiness can be achieved through political, legislative, and regulatory compromise. Can’t you just imagine a multi-volume Federal Happiness Code along the lines of our incomprehensible Internal Revenue Code? It could be backed up by thousands and thousands of pages of federal happiness regulations administered by multitudes of minions working for the Internal Happiness Service.

Since all governmental power is ultimately coercive power, a logical step on this journey would be to enforce happiness. I’m sure it would be just peachy to have IHS bureaucrats and happiness officers making sure you’ve properly filed your annual happiness return forms. And if you don’t, you might get a visit from gun-toting IHS officers with smiley faces on their badges.

Too far-fetched, you say? That’s what they thought with respect to federal income taxation back when the 16th Amendment was passed.

Why Warren Buffett Loves the Death Tax

A lot of people are bamboozled into thinking the death tax is a good idea because it is supported by Warren Buffett, one of the wealthiest people in the US. The affable Buffett often makes public statements in favor of the death tax, commenting that rich people like him should be required to pay a steep estate tax rate upon their death as a grateful gesture to a nation that gave them an affluent lifestyle. Buffett has insinuated that heirs of wealth often mismanage it, as if their use of their inheritance is any business of his or of the government.

As Buffett gets ready to testify before Congress about the wonders of the death tax, perhaps we should step back and take a look at how insidiously cynical his position is. Buffett talks a lot about the stock/bond investment leg of his business. But you don’t hear him talk much about the two other legs of his business, without which the investment side would not exist.

Grover Norquist discusses in this article how Buffett pretty much owes his entire fortune to the death tax. Dick Patten notes that one of the less renowned legs of Buffett’s business is “a huge casualty and life insurance business which provides massive reserves of cheap capital to support his other two investing activities.” The third leg of Buffett’s business specializes in the purchase of “family owned businesses at fire sale prices.”

Here’s how the death tax works. The high rollers, for whom the tax was designed, actually end up paying little or no estate taxes because they can afford to take advantage of legal “death-tax escape hatches,” as Norquist calls them. Although Buffett (disingenuously) claims that he engages in no tax shelters, he has made arrangements to ensure that his estate will pay no death tax upon his demise. But the mom and pop businesses out there — like your average family farm — often end up owing enough death taxes after mom and dad pass on that survivors must liquidate the businesses.

These people were never high rollers, but assets (like farmland) have enough value on paper when it is passed to heirs that their estates end up owing as much as 55% in death taxes. When heirs can’t pay these high taxes without liquidating the business, businesses like Buffett’s development arm swoop in and pick up the property at bargain basement prices.

The life insurance business profits from the death tax as well. Not only does it market policies to the wealthy as legal tax shelters, it also markets them to aging people running family businesses as a pre-emptive strike. As Norquist explains, people are encouraged to “plow [their] wealth into life insurance before [they] die. By law, when [their] heirs are paid the life-insurance disbursement, it’s tax-free.”

Of course, for mom and pop businesses to plow their wealth into life insurance, they have to liquidate their businesses, and Buffett’s development business is there to take advantage of this. Two legs of Buffett’s business profit at the same time. Many of these people wouldn’t think about doing this, except that they can see the IRS Grim Reaper standing there ready to collect a massive load of death taxes.

To put it bluntly, Norquist says, “Buffett has a conflict of interest. If the death tax goes away for good, so does much of Buffett’s wealth. He’s doing everything he can to make sure the death tax comes back in full force.” While Buffett runs around looking like the paragon of virtue in this matter, it turns out that he’s nothing more than a shameless profiteer sticking it to people that are victims of bad tax policy.

People need to know about Buffett’s selfish game of deception. I agree with Norquist when he says, “It’s wrong, and somebody on the Senate Finance Committee needs to grill him about it.”

Hoping for the Government to Save Us

Today’s Investor’s Business Daily includes two articles about the current high price of oil. The articles are promoted as being from opposing left and right perspectives, but if you were to read each article without this preconditioning (and without knowing anything about the authors); you’d be hard pressed to see where they disagree.

Indeed, Robert Samuelson (on the left) and Victor Davis Hanson (on the right) both agree that we are entering “a new geopolitical era,” as Samuelson puts it. In fact, reading the articles, I’m not sure the two authors substantially disagree about anything. They each highlight different perspectives about the oil economy, but their views seem quite compatible with each other.

Both writers note the substantial increase in demand for oil from China, India, and developing nations. Samuelson notes that, despite plentiful reserves, the capacity to exploit those reserves began to be outstripped by demand in 2004 for the first time in two generations. He discusses how higher prices make negotiations with suppliers more difficult. Hanson mentions our alliances with “creepy suppliers” and rips on domestic oil firms for charging the international rate for oil that is produced domestically at about the same cost as it was being produced 20 years ago. Both writers are upset about long-term inaction on dealing with a problem that was readily foreseeable.

Hanson’s solution leaves me a little flat. He writes, “It is past time to demand from our presidential candidates, as well as the current government, exactly when and how they plan to slay this many-headed oil monster.” Samuelson suggests that we “Raise fuel economy standards for new cars and trucks; gradually increase the gas tax (possibly offset with tax cuts) to induce people to buy those vehicles; expand oil and natural gas production in Alaska, the Gulf of Mexico and off the Atlantic and Pacific coasts.”

In other words, both of these guys are calling upon the great savior of the almighty federal government to come down and rescue us from ourselves. Samuelson, at least, acknowledges how politically unlikely it is that his suggestions will gain any traction. Hanson’s solution would surely produce a lot of hot wind, but little else.

I think both of these distinguished gentlemen are barking up the wrong tree. And while each is well educated on economic issues, they both seem to have forgotten some of the basic rules of economics. Although Samuelson notes that “higher prices will [eventually] dampen demand,” neither he nor Hanson seems to have any inkling that higher prices will eventually spur market-based solutions — provided that the government doesn’t thwart them.

Government should get out of the way. It should quit oil subsidies and other oil-friendly policies that raise barriers to entry into the energy market. Likewise, it should scrap subsidies and policies that support specific types of alternative fuels. For all the cash poured into these policies over the years, we have very little to show for it. And some of the results are actually harmful.

When the market actually demands solutions, the market will supply those solutions. History shows us that the form these solutions may take simply cannot be predicted very far in advance. Government tends to work counter to real innovation. Even if the government doesn’t get out of the way, innovation will still come. It will just take longer and be more expensive. The tide cannot be held back forever.

What Do Conservatives Really Want?

“Most Americans . . . think that they automatically deserve whatever they've been promised simply because the promises were made.” — Robert Samuelson

Claremont Institute fellow William Voegeli passionately pleads in this article the case of conservatism’s utter failure to make any significant headway in its main goal of achieving limited government. The past three decades of dynamic GDP growth “offered a great opportunity to reduce the relative size of the public sector.”

Voegeli argues that people had more capacity than ever before to assume personal responsibility for many of the human services provided through government. “[G]overnment spending could have grown robustly and still expanded more slowly than the economy, leaving the public sector to absorb a significantly smaller portion of GDP ….” Instead, government spending growth has tracked with GDP growth. “Spending by all levels of government in America amounted to 31.6% of GDP in 1981, and 31.8% in 2006.”

The vast majority of this spending is for social services. Due to increasing longevity and the aging of the baby boom generation, government spending will consume another 10% of GDP over the next generation, even without creating new programs or otherwise expanding existing ones. Voegeli says, “This is the Swedenization of America on autopilot.”

Conservatives were once certain of their principles, claims Voegeli. But when they gained power, they found “conservatism in practice … hemmed in constantly by the fact that the people insist that promises made to them, vulgar or not, must be kept.” Conservatives “time and again were shocked to discover that the people who built the welfare state were so unhelpful about dismantling it.”

One of the great failures of conservatives, argues Voegeli, is their inability to come to grips with the fierceness of the challenges they face in their task. The huge client class that now exists means that “it is much harder for conservatives to dismantle the welfare state than for liberals to build it.” It’s the age-old problem of trying to put the genie back in the bottle. It would have been better to have fought to keep the bottle from being opened in the first place. Of course, that was virtually impossible when the GOP crashed along with economy and the Hoover administration.

Most Americans at all levels of society once held the “conviction … that government had no rightful business undertaking a whole range of social improvements, no matter how gratifying the beneficiaries might find them,” writes Voegeli. By the time conservatives really started to fight, however, the New Deal had smashed that “legitimacy barrier.” People had discovered that they could vote themselves largesse from the public treasury. Conservatives have yet to fully appreciate that most Americans need to be put on an addiction recovery program and that most Americans are still in the denial phase.

Voegeli says that conservatives need to figure out what it is they are really trying to achieve; where it is they want to end up. He postulates a number of questions conservatives should be debating, and he notes some of the debates going on in conservative circles. Accept the welfare state as an unconquerable reality, or boldly try to kill it off? Start with small, symbolic gestures, or go after big programs that actually drive the cost of government? Realistically try to slow the flow (which hasn’t worked yet), or foolhardily try to stop it altogether?

For example, Voegeli provides an argument for accepting the inevitability of the welfare state. “Conservatives who make peace with the New Deal accept the legitimacy of government programs to help the small minority of citizens who are chronically unable to fend for themselves and the larger minority occasionally and transitionally unable to do so.” This school of thought suggests that embracing the welfare state can empower conservatives to help design programs that promote self-reliance and personal prosperity.

On the other hand, says Voegeli, many conservatives feel that any acceptance of the welfare state is tantamount to a repudiation of basic conservative principles; the constitutional “distinction between the powers granted to the federal government and those reserved to the states or to the people” (Ronald Reagan’s first inaugural address). If conservatives don’t insist on re-enthroning original constitutional principles, asks Michael Greve of the American Enterprise Institute, “how can they contest other transformations, past or proposed?” Voegeli writes, “The road to Sweden is paved with sound concessions.”

“The real question for conservatives, then,” asks Voegeli, “is not whether to reject the New Deal but which New Deal to reject--the one on the ground, the thick roster of activist government programs; or the one in the air, the rhetoric and ideas justifying the perpetual existence and expansion of those programs.” Answering this question, Voegeli asserts, “It makes sense for conservatives to attack liberalism where it is weakest, rather than where it is strongest.”

In this light, liberalism is strong in the same way that a drug dealer holds sway over his users, except without the immediacy of the basic cost. “Citizens are encouraged to regard the government as a rich uncle, who needs constant hectoring to become ever more generous.” But liberalism is weak when it comes to trusting individuals and empowering individual choice, as even some prominent Democrats note.

Voegeli says that conservatives must “insist that limited government is inseparable from self-government.” They must insist that individuals be empowered to “choose the size and nature of government programs, rather than have them be chosen for [them] by entitlements misconstrued as inviolable rights.”

Voegeli notes that liberals will continue to tell Americans, “We want the government to give things to you and do things for you.” Conservatives must, he says, be unstintingly diligent in highlighting and educating Americans on the costs and burdens that each of these benefits impose. Voegeli asserts that liberalism has displaced “Americans' rights as citizens with their "rights" as welfare recipients.”

The reality of the matter, however, is that for conservatism to flourish and prevail, a lot of votes are required. It’s a lot easier to buy votes with promises of increasing piles of treats than it is to extract votes with promises of reality and responsibility. It’s easier to go to the dealer than into rehab (unless it’s a celebrity rehab center). That’s why there are many liberals in both major parties. Although political success cannot be assured by remaining true to conservative principles, says Voegeli, at least such success will be deserved, regardless of whether it comes or not.

What is quite apparent from Voegeli’s article is that the conservative movement isn’t nearly as monolithic as some make it out to be. There are significantly differing schools of thought within the movement. As always, groups with differing ideologies struggle for control. While it looks like those that embrace big government have worn out their welcome, this does not necessarily indicate that small government conservatives are ascendant. The movement’s current troubles and internal struggles might be useful if the result is some kind of useful path forward.

Do Intellectual Properties Need Legal Protection?

The eminent economist Friedrich Hayek was a staunch defender of how essential private and “several” property is to a modern free society. In his book, The Fatal Conceit, Hayek includes some very interesting discussion about the evolution of property laws from the communal structure of primitive societies. He offers very clear reasoning as to the importance of private property ownership, while admitting that the “institutions of property, as they exist at present, are hardly perfect;” and require further evolution (p. 35).

While Hayek is unyielding in his defense of private property ownership, he takes a markedly different view with respect to intellectual properties, such as copyrights and patents. Hayek writes (p. 36-37):

“The difference between these and other kinds of property rights is this: while ownership of material goods guides the use of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopedias, dictionaries, textbooks, and other works of reference could not be produced if, once they existed, they could freely be reproduced.

“Similarly, recurrent re-examninations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period (Machlup 1962).”

When Hayek died in 1992, the Internet was still a rather arcane tool used only by a relative few. I wonder what he would think of efforts like Wikipedia, a reference work which anyone willing to do so could readily replicate? If some intellectual properties should be considered worthy of copyright, and others not worthy of it, as Hayek proposes; who should make that decision? Should such a decision be made by class or on a case-by-case basis? If by class, how would the rule be kept current with developments that might render it obsolete? If case-by-case, what kind of system would govern the decision making?

I admire Hayek a great deal, although, I don’t completely agree with him on every issue. I believe that the current state of American intellectual property law causes many problems. But I think that the model to which Hayek alludes could also prove rather problematic. What would it be like to have no property laws governing the vast majority of intellectual properties? It sounds scary, but Hayek also implies that society would naturally evolve and implement rules sufficient to govern the matter without any kind of central authority creating the rules. Once those rules have become accepted through a natural evolutionary process, they would likely be officially codified.

I have seen a lot of whining about the current state of our intellectual property laws. But I haven’t seen much discussion about what should be done. I’m putting the matter into my puny brain so that it can do background processing and information gathering. I’d be interested in reasonable thoughts others might have on this issue.

Elections Mean Something

I am used to being a contrarian when it comes to elections. That is, I frequently find myself in disagreement with the majority of voters. I often think they’re wrong. And they clearly often think that I’m wrong. That’s OK. That’s how elections are supposed to work.

I actually did get matched up with the majority on exactly one of the items on yesterday’s ballot. The one guy whose sign I had in my front yard was elected to my city council. Still, only about 38% of registered voters in my city bothered to vote. And that was considered an extremely high turnout. Turnout would undoubtedly have been much less had not the controversial voucher referendum been on the ballot.

In Weber County, where I live, voters may have narrowly approved a sales tax increase (50.36%-49.64%, a margin of 281 votes out of 39,295). But as of this morning, three precincts were still outstanding and there are yet absentee ballots to be counted. So we’ll have to keep an eye on this one.

School vouchers went down big time. With 96.64% of precincts counted, the spread was 62.19% against to 36.81% in favor. This SL-Trib article reports that Patrick Byrne, the principle funder of the pro-voucher side, issued a sour grapes whine that the referendum was “a "statewide IQ test" that Utahns failed.” Note to Mr. Byrne: Calling the people whose support you need to further your cause stupid is probably a good way to reduce support even further. The many Utahns that voted against vouchers are certainly feeling vindicated as they are hearing Mr. Byrne’s sound bite today.

The Trib article also quotes state School Board Chairman Kim Burningham as saying, “We believe this sends a clear message. It sends a message that Utahns believe in, and support, public schools.” This belief is a fine example of a logical fallacy. The vote may indeed mean what Mr. Burningham suggests. However, it may also mean that, despite the fact that people think our education system stinks, they disagree that vouchers are the best way to remedy the situation.

However, one thing is now abundantly clear. The UEA has functionally demonstrated that it is the most powerful political entity in Utah. The UEA and its fellow travelers pulled out all the stops on killing the voucher law passed by the legislature earlier this year, and they won — big time. The UEA will come into the 2008 legislative season with more political power than it has ever had.

Expect to see the governor and the legislature led around like cattle. Oh, not every legislator will kowtow to the UEA, but I would be very surprised if the overall legislature didn’t act like a wholly-owned subsidiary of the UEA. This does not bode well for Utah’s school children or for Utahn’s in general. As Rep. John Dougall (R-AF) reports in this post, the UEA “opposes improving academic achievement.” Its practice is to stonewall and ignore when ideas are solicited for ways to improve, because the UEA is invested in the status quo.

Rep. Dougall writes, “To talk about improvement would require an openness to admit that some things can be done better. It would require a discussion about change and the UEA opposes change.” He says that “the UEA takes the approach that if you are not with them 100% of the time, then you are against them.”

Regardless of whether voters rejected vouchers because they believe the solution was flawed or because they are anesthetized into thinking that Utah’s schools are fantastic, the result is that the UEA will be even less incentivized to be part of the solution to Utah’s education problems.

Another lesson is pointed out by LaVarr Webb (here). He says that voucher proponents lost vital ground early in the campaign when they allowed “the education establishment [to] successfully fram[e] the debate as pro-public school vs. anti-public school.” Webb says, “An important political lesson here is to never allow your opponent to define you early in a campaign.”

Jesse Harris discusses a number of other flaws with the pro-voucher campaign in this post. The problems, he says, began with the legislative process. Years of compromise amounted to only minor tweaking. The result of the narrowly-passed bill was a law that was easy to demagogue. This process has unwittingly empowered the UEA; the very establishment voucher supporters sought to diminish.

We are a society awash in polls. Most polls don’t really change things. But elections have impact and meaning. They actually change things. For better or worse, yesterday’s election will change the dynamics of Utah politics.

Are Utah's Public Schools Really That Good?

School choice opponents regularly intone that Utah schools are fantastic, and that we should avoid doing anything that would ‘hurt’ them. I must say that many of my kids’ teachers have been fantastic. Some have been nearly superhuman. Some have been — well — much less so. But often, even the best teachers are prevented from serving the kids as well as they could by a lethargic bureaucratic system.

Reality can be a hard thing to face. Utah’s public schools are not, in fact, as wonderful as all the rhetoric would suggest. Oh, they look alright when you compare them with the national average. But when you compare them with states with a similar demographic profile, the picture doesn’t look so rosy.

This Utah Foundation report found that “Utah is the lowest-achieving state in its overall demographic peer group.” The report says, “States with similar student poverty levels, and ethnic profiles score much higher than Utah in 8th grade math, reading, and science tests administered through the National Assessment of Education Progress (NAEP).” Similar problems were found for 3rd, 5th, and 11th grade performance.

Comparing Utah schools with the national average is not a very accurate measure. It’s kind of an apples-to-oranges comparison. When you actually compare apples to apples — when you compare Utah schools to those in states with similar demographics — Utah is THE WORST!

This WJS article (requires subscription to read full article) reports that “Utah's children may not excel in math or English, but their teachers are very good at instructing them in how to run a political campaign. As 2007 achievement test data show another disappointing year for the state's children, the teachers union is running a multi-million-dollar campaign to insulate itself from competition.”

And here is where the counter argument comes into play. When the reality of the performance of Utah’s schools comes up, opponents of school choice then say that the problem is that our public schools need more money. (More money is ALWAYS the answer, of course.) They argue that we shouldn’t do anything that could take money away from our public schools.

So, Big Brother advocates basically want to have it both ways. Our schools are so great that we don’t want to take money from them. But they are also so bad that we can’t afford to take money from them. So, no matter what, it would be bad to reduce public school funding in any way, right? Perhaps it should be expected that such a contradictory argument would not seem problematic for many people educated in Utah’s public schools.

Here’s the blunt reality. We are in last place in the school funding race with other states (despite spending more than 250% per student in inflation-adjusted dollars than we did 30 years ago). We’re not keeping up with the Joneses. Given Utah’s high birth rate and average income rate, this situation is not going to change. We’re about maxed out on the amount of blood we can squeeze from the taxpayer turnip. But whether we like it or not, we will add students at a much higher rate than we will add income tax revenues over the next couple of decades. Thus, we will soon hit a point where there will be a continually decreasing amount of public funding available per student.

How do you increase education investment when the available sources are tapped out? Answer: you get some people to volunteer to pay more into the education system. I’m not talking about the public education system, but the overall education system. After all, we should be concerned more about whether a child receives a proper education than whether that education occurs in a government-run facility.

Vouchers would incentivize more parents to volunteer to pay extra out of their pockets for their children’s education. The hope (and let’s face it; despite all of the studies, it’s just a hope) is that enough parents would do this to relieve the funding pressure the state is about to experience. While this would result in public schools getting less than the whole education funding pie, the pie would be bigger and the actual amount spent per student would increase.

As has been found in other areas where vouchers have been tried, parental involvement would increase in both the public and private schools in the system, and educational quality per student would increase. (See related NY Sun article.)

The power brokers in the current education system are deathly afraid, not just of vouchers, but of anything that would disrupt the status quo and break up their monopoly. Clearly we need to do something about the low quality of Utah’s schools. Do we believe the current power brokers’ suggestion that just doing more of what we are currently doing is the answer? Or do we take a bold step forward into improving education for all students? You get to decide — tomorrow.

Is a Weak Dollar an Ailing Dollar?

The US Dollar is at an all-time low when compared with other commonly traded currencies. This is known as a weak dollar. It’s been trending steadily downward for over six years now, having lost some 30% of its value against key foreign currencies during that time.

Why has the dollar been so weak for six years? The CATO Institute’s Steve H. Hanke writes (here), “At present the Bush Administration's economic policies are perceived by most as being inconsistent, if not incoherent. Consequently, confidence in the dollar is low, and the greenback looks set to continue on its downward course. Indeed, once a currency starts to trend one way or another, it will continue to do so until it provokes a policy response.”

Hanke wrote that back in March of 2004, when the dollar was much stronger than it is today. Since that time, the dollar has continued its slide, confirming Hanke’s observation that a currency’s trend will continue until policy changes.

But a weak dollar is not all bad. ‘Weak’ tends to denote bad and ‘strong’ tends to denote good. But in fact, there are advantages and disadvantages to both a strong dollar and a weak dollar. A reasonable explanation of this can be found in this Federal Reserve Bank of Chicago essay.

Bear in mind that events over which the US has no control can have an impact on the value of the dollar. Many variables with complex relationships go into determining the value of a currency. The FRBoC essay lists a few of them about 60% of the way down the page linked above under the headings “Factors Contributing to a Strong Currency” and “Factors Contributing to a Weak Currency.”

A Sept. 14 post on Trader’s Narrative shows similarities between the dollar’s recent performance pattern and its pattern in the months leading up to Sept. 1992. The post shows how the dollar bounced off a low at that time and then significantly strengthened over the next year. The post discusses pattern similarities, comparing current performance of some noteworthy factors to what was happening 15 years ago.

While the Trader’s Narrative post says there is no guarantee that the future will mimic the past, the author writes that “right now everyone expects the dollar to crash as the Fed lowers rates. But things seldom occur the way everyone believes they should. Popular “logic” has a tendency to be ignored by the market.” In other words, he’s more bullish on the dollar’s future than the many bears out there.

Most Americans are blissfully unaware of the current state of the dollar on the international currency market. Those that travel abroad or that buy products from countries with comparatively strong currencies feel the pinch. Their dollars buy less of these goods and services than they used to. But the vast majority of Americans do not fit in this category, so they go on their merry way, rather unconcerned.

This Smart Money article explains how the current weak dollar actually helps many shoppers. This NPR article discusses how the weak dollar is impacting different people in the US. Americans buy a lot of foreign goods. But most of these goods come from China. China’s currency is fairly closely tied to the dollar, so most Americans don’t feel much pain from the steadily weakening dollar.

US economic policies will undoubtedly shift after a new administration comes to power in a little over 14 months, regardless of who wins the election. If those shifts combine with other world events to result in a strengthening dollar, there will be both positive and negative impacts.

Many have painted the weak dollar as a sign that the US is hurriedly heading somewhere hot in a handbag. But reality is actually far more nuanced than such a grim estimate suggests. A weak currency may, but does not necessarily indicate an ailing currency.

Guys That Shave Their Legs

My ninth grader mentioned to me the other day that a couple of other teenage boys in the neighborhood shave their legs. Now, I know that this kind of thing is not new. When I was a teenager there were boys that were competitive swimmers that shaved their body hair. I have known male cyclists that shaved their body hair in hope of gaining a competitive advantage. But this is different than that kind of thing. These guys are doing this for purely cosmetic reasons.

I have acquaintances that do bodybuilding that shave their body hair. This is mainly for cosmetic purposes: to emphasize muscle definition. Most of these guys do this only for competitions, so in a way it is somewhat analogous to the swimmers or cyclists that are trying to improve performance. But it is also analogous to the extreme ‘beautification’ techniques that are common in the beauty pageant industry.

My son’s purpose in telling me about these guys shaving their legs was to insinuate that he thought it was strange behavior. We all engage in vanity to a one extent or another, but my son was wondering exactly who it was these guys were trying to impress. He’s been friends with these guys, but he says that their leg shaving kind of gives him the creeps.

It’s been a long time since I was in junior high and high school, so I realize that there is definitely a generation gap thing going. But I explained to my son that guys back in my day were intensely proud of anything that denoted their burgeoning manhood. Except for the handful of competitive swimmers in the school, no male would consider shaving his legs, as the hair on his legs was a symbol of his masculinity and of the transition from boyhood to manhood.

I realize that cultural norms change with time. When I was in high school, very few of the boys were capable of actually growing a decent looking beard. The few that could grow beards did so as a symbol of their manliness. The rest of us shaved our faces. This was an entirely different thing than shaving legs. The fact that we “needed” to shave was itself a symbol of our manliness. If you were unable to grow an acceptable looking beard, you shaved, because having a spotty growth of light colored scraggly facial hairs was disgraceful and unmanly. Even bodybuilders that shave their body hair do it to show off their manliness.

Most of these teen boys that are shaving their legs are not doing it to be more competitive in a sport. Nor are they doing it to demonstrate their masculinity or burgeoning manhood. Rather, it seems they are trying to show the opposite. They are either trying to demonstrate femininity or they are desperately trying to hold onto their childhood — trying to appear more childlike than adult-like.

We recently bought a book by Michael Gurian titled The Wonder of Boys. We also have Gurian’s book The Minds of Boys. Gurian contends that our society is doing an abysmal job of raising our sons to become happy and productive men and fathers. He discusses positive ways that these goals can be achieved. And I guarantee you that male leg shaving is not among his suggestions.

As our society increasingly emphasizes feminine-centric models in education and development, the masculinity of young males is marginalized. The trouble is that it does not go away, so boys end up manifesting it in ways that are counterproductive and/or anti-social. They turn to violence in entertainment or in reality. They act up at school and get drugged so that they conform to the ideals of the feminine-centric classroom culture. But they do not learn what it means to be a productive man and father. We end up with men that are confused about their roles and that act like adolescents long into their adult years. They sire children, but they have no clue how to be a real father to those children.

I am actually rather amazed at how many of Gurian’s suggestions we have naturally implemented in our family over the years. No wonder my son is creeped out by his male friends that shave their legs.

Update: I finally turned comments off on this post. While I have no problem with people expressing their opinion about male body shaving practices, I frankly don't care to moderate any more comments about the matter. Those that have an opinion on the matter are free to post on their own blog about it.