2+2=5

If the legislation for cap-and-trade is such a good idea, why did it barely pass the House of Representatives by a slim margin that required a full-court-press from the White House and various lobby groups? The answer may that cap-and-trade is the legislative equivalent of 2+2=5.

Newt Gingrich used this illustration recently to explain why cap-and-trade is such a tough sell. To put it simply the arguments don't add up and are contrary to common sense. You don't have to know anything about the scientific claims being made about climate change to see that this legislation is based upon many a false premise.

Gingrich reminded us that during the Polish Solidarity freedom movement, the rallying cry was 2+2=4. It meant that even though the government would try to tell the people that 2+2=5, the people knew that to be free they had to tell the truth.

The proponents of the cap-and-trade bill tell us that this legislation will not only save the planet from climate change, but it will produce all sorts of green jobs. In other words, cap-and-trade will be a win-win for everyone. That's an example of 2+2=5.

Just look at some of the analysis of job loss. The Heritage Foundation predicts annual average job losses in the near term of over one million. After 2035, 2.5 million jobs are lost each year.

Cap-and-trade proponents also suggest that once the U.S. imposes these energy costs on itself, developing countries like China and India are sure to follow. But most of us know that won't happen. The rulers of these countries aren't going to be convinced by our example. Instead, they will welcome the jobs that move from the U.S. to their countries. Once again, 2+2=5.

You can look at all the questionable science and the claims and counterclaims. But all you have to know is that 2+2 does not equal 5. I'm Kerby Anderson, and that's my point of view.

Inflation

As June was winding down, a lead article in USA Today was talking about something that I have been talking about for months: inflation. Why are economists talking about soaring prices when the consumer price index has fallen in the last year? The answer is simple: debt. The federal government owes the world more than $11 trillion. That is $37,000 for every man, woman, and child in America. And in this next fiscal year, we will add nearly $2 trillion more to the national debt.

Some believe this will fuel runaway inflation. Marc Faber, editor of the Gloom & Doom Report, predicts that U.S. inflation will someday match Zimbabwe’s inflationary spiral. Others like David Wyss, chief economist for Standard & Poor’s believe you won’t get inflation until the economy gets back and that could be five years from now.

In my new book, Making the Most of Your Money in Tough Times, I talk about these massive debts and unfunded entitlements that prudent individuals and families need to consider. The federal government is trillions of dollars in debt and needs to borrow $15 billion each day just to fund the deficit. There will be a price to pay for all of this borrowing, and an even greater price to pay if we begin to print money.

A burst of inflation would lead to higher interest rates. The Federal Reserve usually raises short-term interest rates to cool off the economy and tamp down inflation. These higher interest rates would also affect bonds, as bond traders would demand high bond yields.

Another impact of inflation would be the devalued dollar. While this might make U.S. exports more attractive, it also makes imported goods more expensive. It is even possible that a significantly devalued dollar would lose it privileged place as a world currency.

Sure the Federal Reserve has some tools to contain inflation. But the Fed doesn’t have control of federal spending, and that could bring on inflation. So be prepared. I’m Kerby Anderson, and that’s my point of view.

Origin of the Declaration

Tomorrow is the 4th of July, and I thought I would take a moment to talk about the origin of the ideas in the Declaration of Independence. Thomas Jefferson said that many of the ideas in the Declaration came from John Locke. Jefferson also gave credit to the writer Algernon Sidney, who in turn cites most prominently Aristotle, Plato, Roman republican writers, and the Old Testament.

Legal scholar Gary Amos argues that Locke's Two Treatises on Government is simply Samuel Rutherford's Lex Rex in a popularized form. Amos says in his book Defending the Declaration: "that the 'law of nature' is God's general revelation of law in creation, which God also supernaturally writes on the hearts of men."

This foundation helps explain the tempered nature of the American Revolution. The Declaration of Independence was a bold document, but not a radical one. The colonists did not break with England for "light and transient causes." They were mindful that Romans 13 says they should be "in subjection to the governing authorities" which "are established by God." Yet when they suffered from a "long train of abuses and usurpations," they argued that "it is the right of the people to alter or to abolish it, and to institute a new government."

Jefferson also drew from George Mason's Declaration of Rights (published on June 6, 1776). The first paragraph states that "all men are born equally free and independent and have certain inherent natural Rights; among which are the Enjoyment of Life and Liberty, with the Means of Acquiring and possessing property, and pursuing and obtaining Happiness and Safety."

The Declaration of Independence is 233 years old. It was a monumental work at the time, and even today its words ring with truth and inspire new generations. I'm Kerby Anderson, and that's my point of view.

Wikipedia

How accurate is Wikipedia? This is not an idle question for journalists to ask or even for students who write papers to ask. Just how accurate are the nearly four million articles on Wikipedia?

John Seigenthaler was the founding editorial director of USA Today and served as an assistant to Attorney General Robert Kennedy. Imagine the pain he felt when he read: "he was thought to have been directly involved in the Kennedy assassinations of both John, and his brother, Bobby." This false and malicious "biography" appeared under his name for 132 days on Wikipedia. And his son, who is a journalist with NBC News, told him that the same malicious text also appeared on Reference.com and Answers.com.

To add insult to injury, Seigenthaler found that there was no way to know who wrote this awful statement. And he found that federal law protects online corporations from libel lawsuits.

University student Shane Fitzgerald discovered that once an erroneous post is placed on Wikipedia, it can travel around the world. He posted a phony quote a few hours after a French composer died. It flew straight to dozens of blogs and newspaper websites in Britain, Australia, and India. It is worth mentioning that the administrators at Wikipedia caught the quote's lack of attribution and removed it.

It turns out that these gross errors are the exception rather than the rule. The journal Nature set out to check the accuracy of Wikipedia. They concluded that it covers scientific topics about as accurately as the Encyclopedia Britannica. Doing a side-by-side comparison of articles, the researchers concluded that the average scientific entry in Wikipedia contained four errors or omissions, while Britannica had three.

The lesson to be learned is to check your sources with other sources. Just because it is in print or online doesn't always mean it is true. I'm Kerby Anderson, and that's my point of view.

Givers and Non-Givers

America is split into two nations: givers and non-givers. Approximately three-quarters of Americans give their time and money to various charities, churches, and causes. The other quarter of the population does not. That is what Arthur Brooks found and wrote about in his book, Who Really Cares.

His book runs counter to the conventional wisdom of our day. We are told that liberals are charitable (because they advocate government redistribution and welfare programs) and conservatives are not (because they oppose some of these policies). The problem with the argument is that is assumes that government programs are charity. They are not. Charity is defined as a voluntary gift from someone.

So the first thing we should do is properly define charity. Once we do that, we can look at who are the givers and who are the non-givers. Brooks found that households headed by a conservative gave 30 percent more money to charity than households headed by a liberal. He also found that this difference in giving was not due to income differences. Actually, liberal families earn an average of 6 percent more per year than conservative families.

The differences in giving also went beyond money and time. Consider the difference in blood donations. Conservative Americans were more likely to donate blood each year, and they also did so more often than liberals. He found that if liberals and moderates gave blood at the same rate as conservatives, the blood supply in the United States would jump by about 45 percent.

You also see differences when you look at the 2004 presidential election. Brooks found that traditional red states were more charitable than the blue states. For example, of the 25 states that donated a portion of their household income above the national average, 24 of those states gave a majority of their popular votes to George W. Bush. Of the 25 states below the national giving average, 17 went for John Kerry. Brooks also found that people in red states volunteer more than people in blue states.

It looks like the people most likely to give money, time, or even blood are those with conservative values. I'm Kerby Anderson, and that's my point of view.

Education and Recession

Poor student performance is taking an economic toll in America. So says Laura Vanderkam in her recent USA Today column entitled "The Permanent Recession." Her thesis is simple: American schools are not producing students with high academic achievement, and researchers have estimated that these schools are costing us more than a $1 trillion each year.

Her first point has been well documented. Most Americans think the U.S. schools are lousy. One poll found that only 22 percent of Americans give the nation's public schools an "A" or "B" grade. But here's the catch: they think the problem lies with other schools. A full 72 percent give their eldest child's school a good grade.

But the real comparison should not be between America's schools but with U.S. schools and the rest of the world. We live in a global economy, and American students will be competing with students around the world. And currently the top students in America score way below the top students in other countries.

One management consulting company found that if U.S. children did as well as students from these other nations (such as Finland or South Korea), our economy would be much larger. This means that our schools are costing us $1.3 trillion to $2.3 trillion every year. In essence, our educational failure has given us a permanent recession.

Laura Vandekam believes we should not only attempt to address lagging achievement in our poorer students, but we should also push our brightest students to achieve their full potential. She points out that the idea behind No Child Left Behind was good but unfortunately the states often created tests that were so easy as to be meaningless.

She suggests we use tests that can be compared internationally and publicize the results. America's students are not being challenged at anything near the level they can handle. Not only is it affecting our place in the world, it is also costing us. There is an economic cost to failure and mediocrity. I'm Kerby Anderson, and that's my point of view.

Safeway and Health Care

The CEO of Safeway has been writing op-ed pieces and testifying before Congress. But Steven Burd hasn't been talking about how to run grocery stores. He has been educating anyone who will listen about how to cut health care costs.

Health care spending has been increasing faster than just about any other area of consumer spending. So when the CEO of a major company explains how using Safeway's model we could cut the national health care bill by 40 percent, we should listen.

The model that Safeway uses capitalizes on two key insights. First is the realization that 70 percent of all health care costs are a direct result of behavior. Second, nearly three fourths of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes, and obesity).

A high percentage of these diseases and conditions are preventable. So their model is similar to auto insurance premiums in which driving behavior and accident risk determine the cost of premiums.

Employees are tested for the four conditions and receive premium discounts for each test they pass. If they pass all four tests their premium is reduced substantially. "Should they fail any or all tests, they can be tested again in 12 months. If they pass or have made significant progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year."

Steven Burd says that this program has built a culture of health and fitness at Safeway. For example, their obesity and smoking rates are roughly at 70 percent of the national average. And most of the employees rate the health care plan as good, very good, or excellent.

These four chronic conditions are not entirely due to behavior, but doesn't it make sense to create incentives to change behaviors that are a direct result of behavior? While we are debating health care reform, why not focus needed attention on personal responsibility with financial incentives. I'm Kerby Anderson, and that's my point of view.