A Millionaire for Fifty-three Cents

Venezuela is issuing paper notes denominated at One Million bolivars. The notes are worth just over fifty cents each. Today. In a week or a month they will be worth less than fifty cents. Just one more predictable step down the path of socialism and profligate government spending.

Inflation robs money from people’s pockets without the risk of inserting one’s hand. The government prints money and spends it, reducing the value of money already in people’s pockets. People see prices skyrocketing and know they are poorer (can buy less), but most don’t understand why. https://www.middleschoolmba.com/lipstick-on-a-pig/

The government, of course, points the finger elsewhere – businesses, capitalism, colonialism, greed, the market… I’m sure they’ll soon expand the list to include bedbugs, the phases of the moon, fur balls, and solar wind.


WSJ Clueless?

You would think that the Wall Street Journal would understand the laws of Supply and Demand.  But this article demonstrates how little truck people who should know better give to these Laws.

Sure, they’ve heard of them.  But they don’t really take them to heart.  They don’t grasp that these are natural laws, as unbreakable as gravity.  WSJ would never report an elderly person who fell, breaking their hip, and call gravity mean-spirited.  No, WSJ understands that gravity is an impersonal force.

But somehow they seem to think that Supply and Demand are optional concepts.  That supply, demand, and price are not actually locked in an unbreakable relationship, but subject to people’s moods, perhaps.


Khan Concurs

Here’s a great article by Salmon Kahn of Kahn Academy.  Blended learning elevates the experience for both teacher and student.  It’s a powerful way to leverage everyone’s talents and energy!


Negotiating with oneself

You should never negotiate with yourself.  That is, once you make an offer to your opponent you should never improve your offer until your opponent has made a counter offer.  Kids very frequently make this mistake when they first begin negotiating.  They are anxious for a response from their opponent and make successive offers trying to elicit that response.  They may say, “How about $40…  $35?… $30?…”

Coach them against this urge.  Make an offer and wait.  If your opponent asks you to make another offer, “that’s not good enough” for instance, you can just say, “I’m not going to negotiate against myself.  You need to tell me what works for you.  Make me an offer.”

If, on the other hand, you are in a negotiation with someone who is negotiating with themselves, then just sit there and let them continue.

Watch for this in your kids and take the opportunity to point it out.  Tell them to learn to be comfortable waiting for a response.  The silence can be awkward, but don’t let that push you into negotiating with yourself!  If need be you can do some role playing with them to get the point across.

Don’t let them leave your classroom without this critical life skill!

THSC (guest post by my sister)

My sister, Susie, and I went to THSC last week and she had to share her thoughts about her first homeschool convention:

I am a life-long educator. I say that with a lot of pride, but also reverence. I know that it is a privilege to have been fortunate enough to do something I love and am passionate about in an incredible environment. I teach in the small, utopian private school my three children attended from preschool through 8thgrade. Our school is a uniquely tightly knit community and I can’t imagine a better place, but how do other people educate their children?

For most of my life I have looked at homeschooling with a skeptical eye. In recent years I have had reason to reevaluate my attitude as homeschooling has evolved and progressed to its current state. Over the last three days I attended the Texas Home School Convention (THSC). It was my first time at a homeschool convention and my mind and heart are forever changed by what I saw there.

As I drove up to the Woodland’s convention center near Houston I was immediately struck by the people making their way to the building. There were families everywhere. Moms and Dads holding hands. Kids holding hands with or carrying younger siblings. All of them chatting, smiling, laughing. It looked a lot like people heading into Disney World.

The purpose of the THSC is for homeschoolers to come together to attend seminars on topics of interest and to explore the exhibit hall offering a wide range of curriculum. There were some homeschool-specific seminars like “Homeschooling and the Law”, but there so many options that any educator would be fascinated by that I wanted to attend them all. They ranged in topic from “Critical Thinking: Elusive or Obtainable” and “How to Score Big on the SAT” to “Science Poetry: Perform to Learn” and “Experience Excellence in Writing”. Then there were topics you wouldn’t see at educational conferences, but that should be there: “Is Math Straining your Relationship with Your Child?” (this has to be true for 90% of the population at some point in their lives!). Another was titled “Talk with Me: How Conversation Stimulates Learning” (It seems simple, but how many teachers do you think are doing that?). There were several seminars about parenting, family management, and even marriage. I wanted to attend them all, but I was there to work so I only attended one presentation: Clutter Free by Kathi Lipp. (That in itself was life changing, but that’s my story and not so much about homeschooling except that these people are progressive managers of their homes and lives.)

I was there to help man the Entrepreneurial Arts Middle School MBA booth in the exhibition hall. I was there to sell curriculum. (Doesn’t that sound boring??? I can assure you it was anything but!) These people were here to invest in education, in the future of their children. Not only were the parents there to shop for curriculum, but the kids were there to weigh in on their choices as well! I was amazed to see kids taking parents by the hand and leading them to a booth and saying, “this is what I want to learn about” or “this is how I want to learn math.” I have never seen children so involved in decisions regarding their own education. That in itself was fascinating!

I am the fourth of 5 children so I know what it’s like to travel in a herd. Sometimes you get trampled. These people moved in efficient little units. Sometimes with just one child. Occasionally 4 or 5. They were casual, but cohesive as they explored the exhibit hall. There were some specific activities designed for kids, but kids also sometimes just accompanied their parents to an adult seminar and sat and listened or read a book or played quietly on the floor with a toy or puzzle. (In retrospect, I don’t remember seeing a single kid playing on a cell phone or iPad. I did see kids in conversation with their parents and siblings.) In the three days I was at the convention, I never saw a kid misbehave or have a tantrum. I find that astonishing. I know these folks were sort of on vacation and having fun, but I promise I haven’t seen kids that happy and well behaved at Disney World.

As I mentioned, I did manage to attend one seminar. Since it was about clearing your clutter it was mostly populated by moms with a couple of dads here and there. A few very young children accompanied their moms. I arrived just as the speaker was starting and sat behind a woman who was already focused and ready to take notes.  About 10 minutes later, a young girl appeared. She could not have been more than 8 or 9 years old. She had a baby on her hip and was carrying a diaper bag and changing pad. She expertly handed they baby off to the woman in front of me and quietly said, “Dad’s at such and such, I’m going to so and so. I’ll see you when you’re finished here.” With that the young girl exited as quietly as she arrived and the mom proceed to nurse the freshly changed baby. All smooth as clockwork. I seriously felt tears well up at this beautiful transaction and I am not a crier. I suddenly realized I was surrounded by families who worked together in harmony. Not just parents hauling their kids along in life but kids contributing to the effort to learn and grow and become responsible adults.

Though the families hang together A LOT, the homeschool kids are capable and independent and savvy. I think the general perception is that homeschool kids are sheltered and won’t know how to function in the real world. The truth is that these kids have many more responsibilities than kids who sit in a regular classroom all day. They assist in deciding on curriculum. They help teach siblings. They help care for siblings. They learn to think outside the box. They are independent and intrepid. I can’t say enough good things about the kids at this convention.

No doubt home schooling is a huge undertaking. There were several seminars that focused on managing the enormity of the process with titles like “Maxed Out Moms” or “Overwhelmed.” My favorite title for this type of presentation was “Life in the Fiery Furnace: How to Avoid Homeschool Burnout.” I talked to many parents who attested to the fact that yes, it is a big job and it can be stressful, but beyond that and above all the enthusiastic energy that infused this event there was an overriding feeling of what I can only describe as Peace.

I came away from my first homeschool conference with the feeling that these homeschool people (the big and the small) know who they are and where they are going and are moving steadfastly in their own directions. It makes me hopeful for the future with these people in it. I can’t wait for the next homeschool convention!

Style Notes lll – Pitching

On pitching, we saw similar progression as in negotiating.

Initially, it was all about the product; kids were acting as consumers, a role they know well.  With some encouragement they began thinking about profits and market size and how viable the Business might be (as investors they are buying the business, not the product).

Most of them seem to have internalized the concept of Profit = Sales – Costs (from the Billy Bob and Factory Fun lessons), but they sometimes struggle to see the Business as a stream of profits or losses across time (as do most adults).  Of course, as investors, it’s all about whether that stream of future profits render an adequate Payback on our investment.  That’s the lesson we want to drive home; that’s what separates a consumer from an investor.

Style Notes ll – Negotiating Stages

More on my time at Southfield… on negotiating, I noticed that kids seem to go through distinct stages.
First, they’re trying to understand the concept of their next best option and what sort of target price makes sense.  At this stage they sometimes seem confused and make nonsensical offers when faced with a live opponent.  To help here, we created super-simple scenarios with no extraneous “informational noise”.
In the second stage, they get the next best option concept and are trying to process (in real time) their opponent’s offers in light of their next best option and goal.  Here we see them exchanging offers back and forth speaking nothing but numbers.
Lastly, when they are comfortable with the first two stages, they start to add more color and context instead of simply throwing numbers across the table (“this is a really good bike” or “well, thanks for that offer, but…”).  We also see them starting to be cognizant of their time constraints (and possibly their opponent’s time constraints) in this third stage.
My guess is that each kid needs to experience two to three negotiations to advance from one stage to another (by “experience”, I mean either judging or negotiating).  So once the kids get the hang of the process, it might make sense to break the class into two smaller groups (6 – 8 each) and run two negations at once (each with its own timekeeper and judges).  The smaller, more intimate groups might allow more learning to happen faster (maybe the judges and timekeeper all stand and cluster tightly around the two negotiators so they are all really in the thick of the action).

Style Notes l

Southfield School invited me to do some teaching with the 5th graders.  It was a great experience!  I was reflecting on our classes and wanted to share some thoughts.
Having a student “driving” the software and taking partial responsibility for managing the class was terrific.  I was happy to see that they needed almost zero instruction on how to use the software.
Along the same lines, putting the timekeeper in charge of the negotiations was a big help.   Both helped me spend more time looking at the class rather than a screen, and the kids felt more involved as well.
Many thanks to Southfield for a great time in the classroom!

Poverty Quiz!

Over the last 20 years, what has happened to the world poverty rate?

A: Increased by 22.4%

B: Stayed the same

C: Decreased by 50%

The answer is C, and that means that millions upon millions have left poverty around the world;  mostly in 3rd world countries.  Why?  Because countries have opened their doors (even if not fully) to markets.  No other mechanism has ever, ever come close to this accomplishment. Yay!!


Lipstick on a Pig

Venezeula’s boss, after creating crushing hyperinflation, now proposes to fix it by cutting a few zeros off the bills.  It’s hard to believe that anyone could take his proposal seriously, but such is the level of economic understanding by most people.

Inflation is a clever way to steal money out of people’s pockets without even being in the same room.  Say you increase the amount of money by 1% and you get to spend that money.  It’s a great deal for you.  You buy goods for the cost of printing up some paper bills.  But for everyone else, their money is worth 1% less because prices increase due to the increase in money.  That’s why counterfeiting is illegal; it’s theft.

Governments use inflation all the time to allow them to spend more than they tax (people notice taxes and resist them, but few notice mild inflation).  But hyperinflation, a quarter million bolivars to buy a dozen eggs, quickly impoverishes people and gets a lot of attention.  In response, governments blame everything except the real cause (the government).  During the 1970’s in the US, the government issued WIN buttons (Whip Inflation Now) for people to wear, as if the cause of US inflation was something other than leaving the last remnants of the gold standard in order to spend freely.  But they could do that with a straight face because so few people understand the actual cause of inflation – a huge failure of economics education.

Adopting the US dollar would be a big improvement for the people of Venezuela.  They would exchange hyperinflation for single digit inflation and their government would have some fiscal discipline forced upon it.  But the change is unlikely to happen because without the advantages of theft via inflation the current government probably couldn’t stay in power; and they know that.  So Venezuela’s boss will continue to invent excuses for inflation and leave people in misery instead of putting his power in jeopardy.



Future Shade

A society grows great when old men plant trees whose shade they shall never sit in.  This Greek proverb is often explained as meaning that a selfless society thrives.  That’s a miss.  It’s not selflessness that leads one to build something which will provide benefits past one’s own lifetime; it’s a long time horizon.

Humans are the only animal capable of understanding their life and thinking past their own existence.  Those who build businesses or plant trees that will outlast them are usually not motivated by selflessness as much as a desire to create something lasting; maybe for their own offspring or maybe just for themselves.

A culture that promotes long time horizons creates a great society.  An example is Liechtenstein, perhaps the richest country in the world on a per capita basis.  Their culture is one of very long time horizons.

Adam Smith said the requirements for “opulence” were Peace, Easy Taxes, and Tolerable Justice.  To that we need to add long time horizons.

Drs. to Prostitutes

I prefer not to post something this mature but I have to use whatever means I can to combat these unfathomable injustices.  Venezuela has followed the classic pattern, a well-worn road strewn with human wreckage.

Stalin said that a single death is a tragedy while a million deaths is only a statistic.  VE has millions suffering every day; lack of food, lack of medicine, lack of everything, state repression…

One sad barometer of a dead economy is the women who, against every fiber inside them, take up prostitution to feed their families. Just to arrive at that situation they have gone through unimaginable suffering.  But their suffering has only begun.

We’ve watched this story unfold inexorably for a decade – step by step down the worn path.  Price controls, shortages, nationalized industries, inflation, currency controls, political repression.  There are statistics that capture all of these.  But no statistic can measure the suffering and heartache that drives a teacher or doctor to be a prostitute.

Just as women with no better options than prostitution flooded out of eastern Europe into the west after the FSU fell, they are now flooding out of VE into Columbia.  So predicable, so sad, so preventable…

In Venezuela, they were teachers and doctors. To buy food, they became prostitutes.

Soviet Asthetics

Traveling this week in Estonia, one of the former soviet states.  All the soviet relics (buildings, statuary, monuments) stand out as large, drab, uninspiring, and usually of concrete.  In a word, ugly.

And why not?  The soviet system was not a human institution like the market, which evolved organically to meet the needs of humans interacting voluntarily.  Instead it was a planned, top-down, socially-engineered system which sought to remake humans in some theoretical “new man” image.

It was a system which disliked this species, homo sapiens, and wanted to fundamentally alter it, all the while claiming to love and nurture humans.  Thus, the entire system was based on lies and compulsion.  Wouldn’t it make sense that such a system would produce artifacts which would strike humans as ugly?

There’s an eerie consistency among the gulags, military displays, drab buildings, imposing statues, and KGB memorabilia.  It’s all of a piece and it’s all ugly.

Defending GenX

A lot’s been written about the problems with “Generation X”.  This is another case of over-aggregation leading to a false conclusion.

Sure, there are way too many whiny, self-absorbed, clueless snowflakes.  But while these snowflakes get all the attention there’s a swath of kids in Gens X, Y, and Z that are lightyears ahead of where anybody else has ever been at that age.  These kids are smart, talented, tough, and visionary far beyond their years.  Maybe we should call them stardusted or stardusters.  They are making the most of the tools and knowledge available today, and they are going to rock our world.

Meanwhile, the snowflakes among them will melt away and run off like so many gallons of rain water hitting the storm drain, never to be heard from or thought about again.

So stop letting snowflakes tarnish your view of Gens X, Y, or Zed.  Maybe the distribution is wider today – a greater proportion of attention seeking crybabies on the bottom end – but those on the top end are way out on the top end.  Just a handful of stardusters will overshadow thousands of sniffling snowflakes.

So here’s to these awesome kids coming down the pike!