Adult Education

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility  provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Do you recognize these words? I added the bold print and I’ll get to that in a minute. It is the preamble of the Constitution of the United States of America. It’s a pretty important document. When our founding fathers came up with it, they didn’t think it was the perfect solution, but they needed something better than what they had, because our new country was in pretty bad shape under the Articles of Confederation. So they came up with the Constitution; in order to form a more perfect system of governance than what they had. Not the perfect system, just one that was better. There really isn’t a perfect system. They did a pretty decent job. Not perfect, but better than it was.

I consider myself to be fairly well-educated, and I like to think I’m also pretty well-informed. Don’t get me wrong, I’m not tooting my own horn here. I also know that the world is full of people who are smarter than I am, including people who are way, way smarter. I’m also positive that there exist people who are not so bright. I was mostly educated in a public school district, although I spent a couple of years in a private school. My public school district was well regarded academically when I attended, and it is still highly ranked today. But there is a problem that I see in my early education, both public and private: we never studied economics to any major extent. It wasn’t until I started studying business in college that I had any real exposure to economics.

I remember walking out of an Economics class in graduate school, where we had just discussed how the federal budget was derived. It’s an ugly process by the way. A friend of mine, Steve, was so upset that he vowed to devote his life to becoming President of the United States in order to change the system. It was a noble thought. I think I would have considered voting for Steve, but I’ve not seen his name come up in political circles. I told him that the problem as I saw it was that by the time he had risen through the ranks of government that he would be swayed by the status quo, and wouldn’t be able accomplish his ultimate goal. We were surprised to find our professor walking behind us and apparently eavesdropping. He was grinning and nodding his head. “That’s right,” he told Steve, “by the time you reach a position of power in the system, the system will have co-opted you.” I don’t know why he was smiling about it. It seems to be a pretty sad indictment of our political system.

Now we as a nation have just been through some difficult times from an economic perspective. We continue to suffer through a major recession (by the way, do you understand the difference between a ‘business cycle recession’ and a ‘financial market recession’? *), and have been brought to the brink of a “fiscal cliff” by lawmakers eager to force their personal beliefs on everyone. By now it should be obvious that what everyone really needs in this country is a clearer understanding of economics.

The place we should start with this economic education is with our elected leaders. I had to look up the part of my state that is represented by the current Speaker of the House of Representatives. I don’t really know what the public school system is like in his district, but if it’s anything like the one here, they aren’t teaching enough Economics. The Speaker attended a private high school, and studied business in college, so he should know a little about what is considered to be the most important issue of the day, but his recent actions might suggest otherwise. Over and over again during the debate we heard the standard rhetoric spewed out that we must maintain adequate income for the “job creators” (that’s political shorthand for “the really rich dudes that pull our strings”) and not raise taxes on the wealthy. Unfortunately, this is flawed logic. The Congressional Research Service conducted one of their fact-filled scholarly reports that showed no relationship between the size of the top tax rate and job creation (by the way, the CRS works for Congress. You would think that the employers would listen to their hired experts). In fact, history tells us that more jobs were created when top tax rates were higher. Respected billionaire investor Warren Buffett laughed out loud at the notion that investors would stop investing if they had to pay a few extra cents on each dollar earned. He went on to say that he and other wealthy people should be paying more taxes, not less.

What I think we should do is to require by law that every Representative, Senator, Federal Judge and senior member of the Executive Branch take a comprehensive course in Economics. There should also be a test, with grades posted so that we can see just how bright (or dim) our elected representatives are. Maybe they might make some better decisions for our country. Perhaps we might make some better decisions about those people we choose to represent us too.

Now I know that some of you might be quoting Ronald Reagan at this point and saying that the government isn’t the solution to our problem, the government is the problem. Yes, I know the government has screwed things up before, but maybe they just lacked a certain base level of knowledge. I recently read Bill Clinton’s book, Back to Work: Why We Need Smart Government for a Strong Economy. You may not agree with the former President politically, or philosophically, but he makes some very strong arguments for the things that can be accomplished by a smart government. Throw in the fact that he is the only guy that has held the job in many years that had three years of budget surpluses. Not even the Gipper can say that. Do yourself a favor and read the book. Your library probably has a copy. Whatever you do, don’t throw up your hands and say it can’t be changed, because it has happened before.

So how do we get a smart government? Let’s start with that required course in Economics for our elected officials. Maybe if Representatives and Senators have to share notes or form a study group, they’ll be able to do something useful, like cooperate enough to make decisions to get our country back on track. Too much time is spent in Congress raising money for reelection, and too little time is spent in formulating ideas to raise the standard of living for the people being represented. That’s not just dumb government, that is a recipe for corrupt government. While we’re at it, let’s beef up the teaching of Economics in our school system. We’re never too old to learn, or too young to start. Educate yourself (Note: watching the news on TV will not make you better educated) and try to interest others in educating themselves.      

*Answer: Read the book, it’s in there. Please note that financial market recessions, such as our current economic situation, as well as that period in our history known as The Great Depression, require a much longer recovery period than the more typical business cycle recessions that are more familiar to us. Just in case you were wondering what the heck was taking so long.