[Anonymous]

Just thought I would share this with everyone. Living at home this summer. My brothers friend wont shut up about how hard his 100 level Biology class is and it is getting extremely annoying. He is taking it this summer and has all the old tests too. My brother told me that he compares it to CPA thinking it is just as hard. Cells, atoms, protons, neutrons, and electrons… They just quizzed me about what was in H2O…and I said Hydrogen and Oxygen…My brothers friend said it was Hydrogen and Carbon!?!

haha

[NJCPA2B]

Why Should You Care About Unions?

https://slac.rso.wisc.edu/why_should_you_care.html

BEC=77, FAR=78, REG=73,74,80, AUD=70,69, 84 DONE!

[75 CPA]

Why do so many government programs fail? We've seen it time and time again. A need is identified, a program is formulated and put into place, everything starts out well enough, and then, perhaps over time, something happens. The program doesn't achieve its goals. Or the amount of resources needed for it to achieve its goals are vastly more than expected.

We've seen this in Social Security, Medicare, the Great Society programs, and the public school system. Is it waste, fraud, and abuse (those favorite whipping-boys of legislators)? Welfare cheats? Incompetence? Just needs a little fine tuning? We're not spending enough (no matter how much we seem to be spending)?

If you haven't been reading Jeff Jarvis's Issues2004 series you really owe it to yourself to start reading them. Follow the links. Read the comments. I was reading the comments in one of the series and spotted the comment from frequent commenter there (and around the blogosphere) Charlie (Colorado):

Jeff, there is an assumption underlying all this that I don't think holds: the assumption that spending more money necessarily correlates with better results.

Everything I've seen suggests, in fact, that spending is negatively correlated with outcomes. That is, the more spent per child, the worse the results.

There's a name for this: Gammon's Law:

Dr. Max Gammon was a British physician who sought to solve a public policy riddle: In the 1960s, the government spent significantly more on health care than it had previously, but the National Health Service didn't seem any better for it. After an extensive study of the British system of socialized medicine, Dr. Gammon formulated his law: “In a bureaucratic system, increase in expenditure will be matched by fall in production.”

Dr. Gammon reasoned: “Such systems will act rather like ‘black holes,' in the economic universe, simultaneously sucking in resources, and shrinking in terms of 'emitted production.' “

Milton Friedman has written this about the application of Gammon's Law:

I have long been impressed by the operation of Gammon's law in the U.S. schooling system: Input, however measured, has been going up for decades, and output, whether measured by number of students, number of schools, or even more clearly, quality, has been going down.

The recent surge of concern about the rising cost of medical care, and of proposals to do something about it — most involving a further move toward the complete socialization of medicine — reminded me of the Gammon study and led me to investigate whether his law applied to U.S. health care. There clearly have been major advances in medical care in the past half century. Indeed, I would not myself be alive today if it were not for some of them. Yet the question remains whether these gains were promoted or retarded by the extraordinary rise in the fraction of national income spent on medical care. How does output compare with input?

Why does this happen? Does it have to happen? The short answer is yes, it does. Unfortunately for those who contemplate grand solutions to the genuine problems in the world. In a modern society the implementation of the kinds of plans we're talking about here requires a bureaucracy. And Gammon's Law is an intrinsic feature of bureaucracies.

Max Weber was the first student to consider bureaucracy seriously. Weber is a fascinating character. Quite a few of the ideas we take for granted e.g. work ethic, Protestant ethic (later applied to Japanese, Jews, and non-Christians), the state's monopoly on the use of force, etc. all derive from Weber.

You can read what Weber had to say about bureaucracy here. From Wikipedia:

A bureaucratic organization is governed by following principles:

• official business is conducted on a continuous basis

• official business is conducted with strict accordance to following rules:

o the duty of each official to do certain types of work is delimited in terms of impersonal criteria

o the official is given the authority necessary to carry out his assigned functions

o the means of coercion at his disposal are stictly limited and conditions of their use strictly defined

• every official's responsibilities and authority are part of a hierarchy of authority, with respective rights of supervision and appeal

• officials do not own the resources necessary for the performance of their asigned funtions but are acountable for their use of these resources

• official and private business and income are strictly separated

• offices cannot be appropriated by their incumbents (inherited, sold, etc.).

• official business is conducted on the basis of written documents

A bureaucratic official:

• is personally free and appointed to his position on the basis of conduct

• he exercises the authority delegated to him in accordance with impersonal rules, and his loyalty is enlisted on behalf of the faithful execution of his official duties

• his appointment and job placement are dependent upon his technical qualifications

• his administrative work is a full-time occupation

• his work is rewarded by a regular salary and prospects of advancement in a lifetime career

An official must exercise his judgment and his skills, but his duty is to place these at the service of a higher authority; ultimately he is responsible only for the impartial execution of assigned tasks and must sacrifice his personal judgment if it runs counter to his official duties.

Note that bureaucracies are not about outputs. They are about process. And it's been known since Weber's time that bureaucracies take on lives of their own. They're like one-celled organisms. Their only objective is survival. And survival in a bureaucracy is not about output but about process.

There's a kind of entropy in a bureaucracy: it becomes more and more organized and less and less work gets done. There are fewer outputs.

The urge to advance in one's profession and to prosper is natural in human beings, human nature if you will. How does one advance or prosper in a bureaucracy? First, you must conform to the established processes. Second, you must rise in the hierarchy and have more people reporting to you. This explains the tendency of bureaucracies to grow over time. And the application of a little network theory should show you that this growth can be very fast, indeed.

It's the simultaneous features of process, organization, and the tendency to grow that results in Gammon's Law. And, since these features are intrinsic to bureaucracies, it's inevitable.

There are only two known organizing principles in modern societies1: bureaucracy and the unpredictable large scale group behaviors of complex systems known as emergent phenomena. Reliance on emergent phenomena to solve the great problems requires an enormous amount of faith and hope.

But if we rely on the grand solutions we'd better be prepared for a lot of failure and to spend more than we can really afford.

[financeguy]

Teachers are underpaid compared to what? If teachers are so underpaid then how come there are so many people going into the industry and willing to take the job?

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[luckypenny786]

Wow is right… It kills me when people are like, “Why are you studying so much? Didn't you learn all of this in school? How hard can it be?” This exam is completely different from the BS we learned (or didn't learn) in college…

I went on a date a couple weeks ago (yes, I actually left my apartment… lol) and I about punched this guy in the face. When I mentioned that I was studying for the CPA exam, he casually was like, “ooh, yea I've been thinking I might take the CPA exam… blah blah.” He has a bachelors in Econ from a decent state school but is currently unemployed. I went on to tell him that the CPA exam is actually, you know, difficult. And he assured me that it would be really easy for him because he's a “genius” and would probably just pass it without studying at all since he never really studied for anything in school. I literally laughed in his face, but just changed the subject to avoid going on a rampage. Needless to say, there was no second date. I really hope he actually does take the exam someday because he'll obviously fail miserably.

D O N E !

[NJCPA2B]

75 CPA, our government programs are the best in the world. Yes some fail, but far more succeed……….I'm sure you would agree that our government programs are far better than the ones in Central and South America, Africa, Asia and most in the form Eastern Bloc countries, infact, only a few countries in Europe have pretty good programs. And if they were truly better, then we the US wouldn't be the world's only super power.

And finance guy, I'm sure you wouldn't want to be a teacher at $28-35K a year. Those salaries attract the least talented individuals in our society…..that's why you have teacher's that molest students…it's the caliber of teacher that a low salary range attracts…students don't learn becuase teacher's aren't very good at teaching anymore…..salaries haven't kept-up with inflation/cost of living…….Believe me, if CPAs were getting paid $28-$35K none of us would be in this blog!

BEC=77, FAR=78, REG=73,74,80, AUD=70,69, 84 DONE!

[NJCPA2B]

luckypenny786……your story made me laugh…thanks…

BEC=77, FAR=78, REG=73,74,80, AUD=70,69, 84 DONE!

[75 CPA]

The philosophy of socialism is failure and the gospel of socialism is envy (Winston Churchill).

Ludwig von Mises wrote, “Authors of economics books, essays, articles, and political platforms demand interventionist measures before they are taken, but once they have been imposed no one likes them. Then everyone—usually even the authorities responsible for them—call them insufficient and unsatisfactory. Generally the demand then arises for the replacement of unsatisfactory interventions by other, more suitable measures. And once the new demands have been met, the same scenario begins all over again.”

“After decades of governmental intervention into the health-care arena, the failures are apparent for all to see. But rather than root out the cause of the problem, Americans are demanding that government do something about it…”

Most Americans, including many free-market advocates, simply will not—perhaps cannot—face the truth: that the welfare state (socialism) and the managed economy (interventionism) have never worked and can never work. No matter what is done—no matter who is put in charge—no matter what plan is used—the result will always be the same: failure. The sooner we come to grips with this truth, the sooner we can begin traveling the road to a healthy and prosperous society (Hornberger).”

The Catholic Encyclopedia's entry on socialism is very interesting. Of course, the historical parts of the entry are incomplete, because it was written before WWI. But the discussion of the ways in which socialism is inconsistent with Catholicism remains applicable.

In summary, the Encyclopedia identifies the following respects in which socialism conflicts with Catholic teaching:

1. Socialism is materialistic. “Socialism appropriates all human desires and centers them on the here-and-now, on material benefit and prosperity. But material goods are so limited in quality, in quantity, and in duration that they are incapable of satisfying human desires, which will ever covet more and more and never feel satisfaction.”

2. Socialism is deterministic. “Holding that society makes the individuals of which it is composed, and not vice versa, it has quite lost touch with the invigorating Christian doctrine of free will. … Any power which claims to appropriate and discipline [the individual's] interior life, and which affords him sanctions that transcend all evolutionary and scientific determinism, must necessarily incur Socialist opposition.”

3. Because of 2, socialism is hostile to the Church and the family. “Socialism, with its essentially materialistic nature, can admit no raison d'etre for a spiritual power, as complementary and superior to the secular power of the State. … The State was never meant to appropriate to itself the main parental duties, it was rather meant to provide the parents, especially poor parents, with a wider, freer, healthier family sphere in which to be properly parental.”

4. Socialism conflicts with the natural law regarding private property. “If man, [according to Aquinas], has the right to own, control, and use private property, the State cannot give him this right or take it away; it can only protect it.”

In other words: “It is true that the institutions of religion, of the family, and of private ownership are liable to great abuses, but the perfection of human effort and character demands a freedom of choice between good and evil as their first necessary condition. This area of free choice is provided, on the material side, by private ownership; on the spiritual and material, by the Christian Family; and on the purely spiritual by religion. The State, then, instead of depriving men of these opportunities of free and fine production, not only of material but also of intellectual values, should rather constitute itself as their defender.”

[financeguy]

https://teacherportal.com/teacher-salaries-by-state

Just by eyeballing it, looks like public teacher salaries average over $40K year. This includes weekends off, holidays off, christmas and spring breaks, and summer breaks. Also includes a defined benefit pension, some of the absolute best health care benefits of any job in the nation, and damn near no matter what after reaching tenure you cannot be fired.

Many public school teachers make in excess of $60K/year not including benefits. Sorry, but there is absolutely nothing wrong with those salaries. If that salary doesn't fit your needs, then go into a different profession. That is the beautiful thing about freedom of choice.

And again, if the salary is so crappy, why are there so many people ready to take a teaching job? So all these people went to college and got master's degrees and went through all the stuff to become teachers, knowing full well ahead of time that teacher salaries are underpaid? So, why, if that salary is so crappy and won't attract anyone, then why are so many people going to school for it? Far more people are trying to become teachers rather than CPA's, so I really don't understand your logic.

BTW, my mom has been an elementary public school teacher for about 15 years now. I'm not saying that teachers have an easy job (some do for sure), but I definitely don't think they are underpaid.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[75 CPA]

https://en.wikipedia.org/wiki/Public_education

“In addition, a recent publication by the United States Department of Education has admitted that the average cost of public education per pupil is slightly more than double the cost per pupil of a private education, even though public schools have more students per teacher. Thus, there was no economy of scale as the per pupil cost should theoretically decline the more students there are per teacher.”

Our total cost per student in our Catholic school, before any payments or subsidizations, is in the $4K range. That is less than half what the state is paying for one of the kids next door.

[financeguy]

Yeah, perfect example of the inefficiency of government

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[italianCPA]

Sadly, I have to agree.

I am a new US citizen.

I went to university in Italy, graduated in what is (rightfully so) already considered the equivalent of a MBA here (180 semester hours). And ALL my classes but 1 or 2 were in business/finance/management/accounting.

I had to work so hard to get what is like a 3.5 GPA here.

When I came here, I took a MBA in what is considered a top 50 business school, got a 4.0 without putting too much effort, just because the level of education was lower than my undergraduate in Italy (pretty much, I've done all that stuff before, at a higher level).

My wife, who came here from the USSR when she was 9, said to me that school was a joke comparing to where she was from. College (she went to a good state school in NY) was a joke (she partied for 4 years and got a 3.5ish). She only had to work in law school. Of course, half-way through it she decided that she would hate to be a lawyer, still graduated, and now we have a $130k student loans to pay off for the next 18 years.

I wouldn't mind having a huge bill if education really gives you a competitive edge, but education is really at a low level, in most cases.

FAR - 7/26/10 - 95
AUD - 8/10/10 - 88
BEC - 8/31/10 - 88
REG - 10/15/10 - 95

[75 CPA]

I've always liked what Steve Jobs (co-founder of Apple Computers)had to say about vouchers. This is from an interview in 1996, so adjust dollar figures accordingly. Link to complete interview is at the bottom.

Q: Could technology help by improving education?

A: I used to think that technology could help education. I've probably spearheaded giving away more computer equipment to schools than anybody else on the planet. But I've had to come to the inevitable conclusion that the problem is not one that technology can hope to solve. What's wrong with education cannot be fixed with technology. No amount of technology will make a dent.

It's a political problem. The problems are sociopolitical. The problems are unions. You plot the growth of the NEA [National Education Association] and the dropping of SAT scores, and they're inversely proportional. The problems are unions in the schools. The problem is bureaucracy. I'm one of these people who believes the best thing we could ever do is go to the full voucher system.

I have a 17-year-old daughter who went to a private school for a few years before high school. This private school is the best school I've seen in my life. It was judged one of the 100 best schools in America. It was phenomenal. The tuition was $5,500 a year, which is a lot of money for most parents. But the teachers were paid less than public school teachers – so it's not about money at the teacher level. I asked the state treasurer that year what California pays on average to send kids to school, and I believe it was $4,400. While there are not many parents who could come up with $5,500 a year, there are many who could come up with $1,000 a year.

If we gave vouchers to parents for $4,400 a year, schools would be starting right and left. People would get out of college and say, “Let's start a school.” You could have a track at Stanford within the MBA program on how to be the businessperson of a school. And that MBA would get together with somebody else, and they'd start schools. And you'd have these young, idealistic people starting schools, working for pennies.

They'd do it because they'd be able to set the curriculum. When you have kids you think, What exactly do I want them to learn? Most of the stuff they study in school is completely useless. But some incredibly valuable things you don't learn until you're older – yet you could learn them when you're younger. And you start to think, What would I do if I set a curriculum for a school?

God, how exciting that could be! But you can't do it today. You'd be crazy to work in a school today. You don't get to do what you want. You don't get to pick your books, your curriculum. You get to teach one narrow specialization. Who would ever want to do that?

These are the solutions to our problems in education. Unfortunately, technology isn't it. You're not going to solve the problems by putting all knowledge onto CD-ROMs. We can put a Web site in every school – none of this is bad. It's bad only if it lulls us into thinking we're doing something to solve the problem with education.

Lincoln did not have a Web site at the log cabin where his parents home-schooled him, and he turned out pretty interesting. Historical precedent shows that we can turn out amazing human beings without technology. Precedent also shows that we can turn out very uninteresting human beings with technology.

It's not as simple as you think when you're in your 20s – that technology's going to change the world. In some ways it will, in some ways it won't.

https://www.wired.com/wired/archive/4.02/jobs_pr.html

[jeff]

I refuse to send my kids to Government-run education. We homeschooled Kindergarten and went the private Christian school route for 1st grade.

Oh, and he scored in the 99th percentile nationwide in math on the Iowa Basics. 🙂

AUD - 79
BEC - 80
FAR - 76
REG - 92

➤ Free CPA Notes

[75 CPA]

Jeff

You are very wise to homeschool your children. Homeschooled children are better educated and better socialized than children from government schools.

[75 CPA]

Commentary: Free to Choose

Wall Street Journal

By MILTON FRIEDMAN

June 9, 2005; Page A16

Little did I know when I published an article in 1955 on “The Role of Government in Education” that it would lead to my becoming an activist for a major reform in the organization of schooling, and indeed that my wife and I would be led to establish a foundation to promote parental choice. The original article was not a reaction to a perceived deficiency in schooling. The quality of schooling in the United States then was far better than it is now, and both my wife and I were satisfied with the public schools we had attended. My interest was in the philosophy of a free society. Education was the area that I happened to write on early. I then went on to consider other areas as well. The end result was “Capitalism and Freedom,” published seven years later with the education article as one chapter.

With respect to education, I pointed out that government was playing three major roles: (1) legislating compulsory schooling, (2) financing schooling, (3) administering schools. I concluded that there was some justification for compulsory schooling and the financing of schooling, but “the actual administration of educational institutions by the government, the ‘nationalization,' as it were, of the bulk of the ‘education industry' is much more difficult to justify on [free market] or, so far as I can see, on any other grounds.” Yet finance and administration “could readily be separated. Governments could require a minimum of schooling financed by giving the parents vouchers redeemable for a given sum per child per year to be spent on purely educational services. . . . Denationalizing schooling,” I went on, “would widen the range of choice available to parents. . . . If present public expenditure were made available to par! ents regardless of where they send their children, a wide variety of schools would spring up to meet the demand. . . . Here, as in other fields, competitive enterprise is likely to be far more efficient in meeting consumer demand than either nationalized enterprises or enterprises run to serve other purposes.”

Though the article, and then “Capitalism and Freedom,” generated some academic and popular attention at the time, so far as we know no attempts were made to introduce a system of educational vouchers until the Nixon administration, when the Office of Economic Opportunity took up the idea and offered to finance the actual experiments. One result of that initiative was an ambitious attempt to introduce vouchers in the large cities of New Hampshire, which appeared to be headed for success until it was aborted by the opposition of the teachers unions and the educational administrators — one of the first instances of the oppositional role they were destined to play in subsequent decades. Another result was an experiment in California's Alum Rock school system involving a choice of schools within a public system.

What really led to increased interest in vouchers was the deterioration of schooling, dating in particular from 1965 when the National Education Association converted itself from a professional association to a trade union. Concern about the quality of education led to the establishment of the National Commission of Excellence in Education, whose final report, “A Nation at Risk,” was published in 1983. It used the following quote from Paul Copperman to dramatize its own conclusion:

Each generation of Americans has outstripped its parents in education, in literacy, and in economic attainment. For the first time in the history of our country, the educational skills of one generation will not surpass, will not equal, will not even approach, those of their parents.”

“A Nation at Risk” stimulated much soul-searching and a whole series of major attempts to reform the government educational system. These reforms, however extensive or bold, have, it is widely agreed, had negligible effect on the quality of the public school system. Though spending per pupil has more than doubled since 1970 after allowing for inflation, students continue to rank low in international comparisons; dropout rates are high; scores on SATs and the like have fallen and remain flat. Simple literacy, let alone functional literacy, in the United States is almost surely lower at the beginning of the 21st century than it was a century earlier. And all this is despite a major increase in real spending per student since “A Nation at Risk” was published.

* * *

One result has been experimentation with such alternatives as vouchers, tax credits, and charter schools. Government voucher programs are in effect in a few places (Wisconsin, Ohio, Florida, the District of Columbia); private voucher programs are widespread; tax credits for educational expenses have been adopted in at least three states and tax credit vouchers (tax credits for gifts to scholarship-granting organizations) in three states. In addition, a major legal obstacle to the adoption of vouchers was removed when the Supreme Court affirmed the legality of the Cleveland voucher in 2002. However, all of these programs are limited; taken together they cover only a small fraction of all children in the country.

Throughout this long period, we have been repeatedly frustrated by the gulf between the clear and present need, the burning desire of parents to have more control over the schooling of their children, on the one hand, and the adamant and effective opposition of trade union leaders and educational administrators to any change that would in any way reduce their control of the educational system.

We have been involved in two initiatives in California to enact a statewide voucher system (in 1993 and 2000). In both cases, the initiatives were carefully drawn up, and the voucher sums moderate. In both cases, nine months or so before the election, public opinion polls recorded a sizable majority in favor of the initiative. In addition, of course, there was a sizable group of fervent supporters, whose hopes ran high of finally getting control of their children's schooling. In each case, about six months before the election, the voucher opponents launched a well-financed and thoroughly unscrupulous campaign against the initiative. Television ads blared that vouchers would break the budget, whereas in fact they would reduce spending since the proposed voucher was to be only a fraction of what government was spending per student. Teachers were induced to send home with their students misleading propaganda against the initiative. Dirty tricks of every variety were financed from a very deep purse. The result was to convert the initial majority into a landslide defeat. This has also occurred in Washington state, Colorado and Michigan. Opposition like this explains why progress has been so slow in such a good cause.

The good news is that, despite these setbacks, public interest in and support for vouchers and tax credits continues to grow. Legislative proposals to channel government funds directly to students rather than to schools are under consideration in something like 20 states. Sooner or later there will be a breakthrough; we shall get a universal voucher plan in one or more states. When we do, a competitive private educational market serving parents who are free to choose the school they believe best for each child will demonstrate how it can revolutionize schooling.

Mr. Friedman, chairman of the Milton and Rose D. Friedman Foundation, is a senior research fellow at the Hoover Institution and a Nobel laureate in economics.

[Author]

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