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A Lesson We Should Remember

7/24/2016

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“We learn from history that we learn nothing from history,” said Friedrich Hegel.
Last week in Reno former Soviet economic advisor Yuri Maltsev began a speech with that quote. We appreciated his remarks, although his message is an ominous one.
Yuri related some of his experiences growing up in Soviet Russia as a warning for people who think socialism is great. In his view, Americans are often far too cavalier about praising certain aspects of socialism and similar collectivism while failing to recognize socialism for what it truly is: state slavery.
From his current post as professor of economics at Carthage College in Wisconsin, he interacts with academic faculty from around the country. The prevailing zeitgeist he encounters among them is: “communism is bad, but socialism is good.” People who hold this view understand nothing of socialism nor communism, Yuri says.
Communism was the carrot in Karl Marx’s system that was supposed to give people the gumption to endure barbaric socialism. The communist vision was a utopia centuries into the future in which governments and central control would melt away and everyone would work peacefully, voluntarily and cooperatively toward the collective good.
But since human beings are motivated to work only if their toils produce some benefit in their own lives, Marx believed it was necessary to break and change the fundamental nature of human beings by imposing socialism on them.
Under socialism, everyone and everything is owned and controlled by government that has no limits on its powers. Government leaders decide who gets what, who works where, and sometimes, literally, which groups starve.
As is often the danger with collectivist movements, individuals in Soviet Russia became expendable. Their lives were viewed as worthless and disposable by government leaders, because only the collective mattered. So between 43 and 60 million people perished either through government direct action or neglect. As Soviet dictator Joseph Stalin famously said, “A single death is a tragedy; a million deaths is a statistic.”
Marx himself was far from a starry-eyed idealist. He understood quite well that this brand of oppression, slavery and even mass murder would be the outcome of his program. As he wrote in 1849, “We have no compassion and we ask no compassion from you. When our turn comes, we shall not make excuses for the terror.”
This aspect of Marx’s vision was also front and center for the early Bolsheviks who laid the foundations of Russian socialism. As Bolshevik leader Vladimir Lenin wrote at that time, “We would be deceiving both ourselves and the people if we concealed from the masses the necessity of a desperate, bloody war of extermination, as the immediate task of the coming revolutionary action.”
This bloody terror was inflicted on families and individuals across Russia and, following World War II, all of Eastern Europe. People lost all rights as individuals and became slaves to the state. People in the West watched in horror and the United States pledged not to allow the advance of this barbaric totalitarianism into free countries.
As Yuri points out, the socialist bloc was never able to compete economically with the West, because slaves don’t think as creatively or work as diligently as free people.
But socialist terror didn’t end simply because Russian factories never produced iPads.
Yuri credits the policies of glasnost and perestroika as the changes that brought about the collapse of the Soviet government. Glasnost means “openness” and it was final Soviet leader Mikhail Gorbachev’s attempt to create some transparency in government. According to Yuri, glasnost removed fear from a political system that was built entirely on fear. Thus, collapse was inevitable.
After hearing the stark warning of someone who endured the socialist ideal for most of his life before defecting, it’s discouraging to see so many Americans who today speak approvingly of this beastly concept. A recent Gallup poll shows more than one-third of Americans view socialism favorably. Among millennials, the ratio is 55 percent.
Between the Russian bloc, China, and other socialist regimes of the Twentieth Century, hundreds of millions of people lost their lives to this dangerous ideology. Many more saw their opportunities for happiness and productive lives vanquished.
That’s a lesson we should remember.
Ron Knecht is Nevada State Controller. Geoffrey Lawrence is Assistant Controller.



Ron Knecht
Economist &
Nevada Controller
775-882-2935
775-684-5777

www.RonKnecht.net
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The World Gets Safer Every Day

7/16/2016

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We were again reminded this week that ignorance can breed misunderstanding and occasionally violence.
We were deeply saddened by the senseless murder of five police officers in Dallas. The young shooter, an African-American, claimed outrage over several earlier shootings of black men by police officers elsewhere. He had no known connections to these men, nor to the police officers he shot.
His motive was based on a logical fallacy to which too many people fall prey.
The human brain is hard-wired to simplify the world to make sense of it. Our brains use schematic reasoning, which creates neural pathways to form associations between certain objects or concepts we perceive to be related. Unfortunately, this natural and generally highly essential process can lead people to group mental concepts together in bizarre oversimplifications.
One example is grouping other humans together into classifications based on physical or other characteristics and then mentally assigning certain traits to the entire group without recognizing important differences among the individuals.
The result is a stereotype. Thinking in stereotypes often leads to poor decision-making. At worst, it descends into misguided tribalism and even violence.
The shooter, Micah Johnson, exhibited both last week. He perceived some identity between himself and men he had never met purely because they were also African-American. He also attributed malice to an entire occupation and to most white people. He then inflicted deadly violence upon innocent people who had no relation to those he perceived to be wrongdoers.
His act was evil, and we do not condone the malicious actions of any individual. It is as inexcusable to us for a police officer to use excessive force or wrongfully kill another person as it is for any civilian to inflict violence on another. Anyone guilty of wrongdoing should be held accountable for their own actions.
Policing is a necessary function of government to uphold the rule of law, protect people and property rights, and ensure that peaceful and productive exchanges can occur in an orderly society comprised of free individuals. We applaud those enrolled in this noble cause and we believe and hope that most officers discharge their duties without bias or ill intent.
We also don’t believe that “a few bad apples spoils the bunch.” That kind of thinking enshrines the primitive tendency of the human mind to create stereotypes. Unfortunately, some individuals break laws and hurt others, but their actions should carry no implications for other folks who might share an occupation or superficial trait.
We are all individuals with unique talents, ambitions, strengths and weaknesses. Fortunately, it is possible to train our minds to overcome primitive stereotypes and to view each other with the individual dignity everyone deserves.
We’re continually disappointed by people in the media who perpetuate primitive notions on behalf of one perceived tribal group or another. We’ve seen much of that in recent days and years. Sensationalism is sadly the currency of the media, and many reporters and pundits tend to stoke those flames.
So, with some happiness and relief we note that the real statistics show senseless violence is on the decline around the world and has been for decades, even though we rarely hear that on TV. Homicide rates in the United States have fallen continuously since 1980. In fact, among the 88 countries with reliable data, 67 have seen a decline in the past 15 years.
According to international data collected by the Early Warning Project, the prevalence of mass killings has fallen to record lows over the past 20 years. Even rates of sexual assault and victimization of children have been in decline for decades. And armed conflicts between nations have become less frequent and less deadly.
It’s difficult to become aware of these facts without consulting the objective data, because the media doesn’t report on attacks that don’t happen or such trends. But the happy news is that, despite occasional tragedies like we saw last week, the world is safer than it has ever been.
To us this means that the bulk of humanity continues to overcome its most primitive and base instincts. More people today treat each other with dignity and value each other as individuals.
We hope these trends continue.
Ron Knecht is Nevada State Controller. Geoffrey Lawrence is Assistant Controller.


Ron Knecht
Economist &
Nevada Controller
775-882-2935
775-684-5777

www.RonKnecht.net
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Nevada Is a Leader in Educational Efficiency

7/5/2016

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Recently, the Annie E. Casey Foundation’s annual “Kids Count Data Book” ranked Nevada 49th among the states in K-12 education.
We always check the actual numbers behind rankings like this. But the so-called "Data Book" provides almost no information about its data sources or how its rankings are calculated.
It's clear, however, the ranking isn’t based on objective measures of educational outcomes. It also considers demographic variables like race.
There’s some correlation between such secondary factors and objective education performance measures. But including them in addition to student achievement essentially double counts their significance in education rankings.
Worse, the demagoguery on public education obscures the fundamental point: People’s lives and living standards have improved dramatically over the past 200 years precisely because folks continually learned to produce more with less in almost every industry – except government, education and health care.
For example, today it takes about three days' average wages to buy a mattress and box spring, while that purchase cost 20 days’ wages 85 years ago. And despite costing only 15 percent as much, today's mattresses are more comfortable than ever!
Why no such improvement in education? Shouldn't improvements in the educational attainment of teachers, technology, online learning platforms and various innovations lead to gains in educational efficiency? Instead, K-12 education continually gets more expensive relative to our incomes while delivering questionable quality.
Educators should be embarrassed about the system's inability to keep up with the rest of the economy. Yet, teacher unions and other beneficiaries of public spending on education have somehow deluded the public into believing more and more money for them is always better for education.
For our children’s future, we must focus on educational efficiency.
We can estimate efficiency using the federal Department of Education's (DOE) statistics on state spending and performance.
State spending on education varies widely by region, with northeastern states spending far more than everyone else. Among mountain west states, Nevada ranks near the middle. Wyoming's oil revenues drive high spending there, and Colorado, Montana and New Mexico all spend slightly more than Nevada. Arizona spends slightly less, and Idaho and Utah much less.
DOE also administers a standardized test in every state on a random basis. It can be used to gauge student achievement in math and reading. The only mountain west state with lower performance than Nevada is New Mexico. However, California routinely scores worse than Nevada despite substantially higher spending there.
Dividing per-pupil spending by the combined score of the eighth-grade math and reading tests in each state tells how much each state spends per achievement point. That determines who has the most efficient school system.
Doing so reveals Nevada again to be near the median among mountain west states. We spend slightly more than Arizona to achieve an identical score and with similar demographics.
Idaho and Utah lead the way nationally, achieving high scores at very low cost. But they also have less than half the concentration of minority students of Nevada and Arizona and thus bear fewer costs of teaching children to overcome language barriers.
Educational Spending & Performance by State, 2013
State
Per Pupil Spending
NAEP Reading + Math
$/NAEP Point
Mountain States
Arizona
$8,546
540
$15.83
Colorado
$10,092
561
$17.99
Idaho
$7,455
556
$13.41
Montana
$11,577
561
$20.64
Nevada
$8,997
540
$16.66
New Mexico
$10,410
529
$19.68
Utah
$7,905
554
$14.27
Wyoming
$18,187
559
$32.53
Other Notable Comparisons
California
$10,617
538
$19.73
Florida
$9,403
547
$17.19
North Carolina
$8,745
551
$15.87


So Arizona and Nevada are leaders in educational efficiency, although neither state has been really effective at reducing costs.
By contrast, Florida has reduced the cost of educating each student by more than $2,200 since 2008 while test scores and graduation rates have continued to improve. This means Florida taxpayers kept more than $5 billion in their pockets in 2013 versus 2008 spending levels while getting better education for their children. Student demographics in Florida are similar to Nevada, but Florida was among the first states to embrace fundamental school reform, including parental choice.
North Carolina, where Geoff grew up, also stands out as a consistently high performer despite taking less out of taxpayer pockets than Nevada does.
For mattresses, fine dining, deodorant and nearly every other aspect of life, the Western tradition has been to continually do more with less so that we can all lead richer and fuller lives. Such progress rightly should be the focus in education too, which means we should strive for efficiency of output and not just feel-good programs.
So, Nevada K-12 education isn't so bad. But there are other states we can learn from.
Ron Knecht is Nevada State Controller. Geoffrey Lawrence is Assistant Controller.


Ron Knecht
Economist &
Nevada Controller
775-882-2935
775-684-5777

www.RonKnecht.com
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    *Opinions expressed here may or may not reflect the views of the Lyon County Republican Central Committee. 

    Author

    Ron Knecht has served as Nevada Controller, a higher education regent, legislator and economist. He can be reached at RonKnecht@aol.com.  
     

     

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