What About the Benefits of Inflation?

All the media attention to Inflation is given Inflation a bad reputation. Yes, Inflation can be bad, but it isn’t bad by default. It’s a lot like Intelligence. Depending upon how high or low your Intelligence rating is there are favorable and unfavorable aspects of what implications that ‘score’ has for numerous situations and areas of your life. [Note: In comparing Inflation to Intelligence measures, it is critical to know that they have an inverted evaluative relationship. A high Intelligence score is viewed favorably while a low Inflation score is favored; and vice versa. There are other attributes between the two concepts which are not as easily aligned, such as there is no ‘negative’ Intelligence score except perhaps for politicians, but you can have negative Inflation: aka Deflation.]

So, how can increasing costs ever be a good thing? Is the media involved in some duplicitous effort to prevent the public being duly “informed” about the issues related to Inflation? Is the Financial industry and companies avoiding these aspects of Inflation because they have their own financial interests in the public’s perception that when you hear “Inflation” it only means bad things? What about the nation’s economists, have they somehow been drawn into a conspiracy of silence?

No, it’s just that the benefits of Inflation are often longer-term effects and some of the benefits occur and no one mentions or associates the fact that Inflation played a role in delivering the benefits. Another factor is that the negative side can often occur rapidly and have an immediate impact upon individuals’ lives and financial circumstances. There is a behavioral economic phenomena: Loss Aversion, which illustrates a disconnect between actual human behavior and the ‘rational’ consumer of classic economic theory where the value of a loss is greater than the value of the cost of the item that would be lost. The logic of cause and effect and the perception of value are not reliable facets of real-world economic operations. The benefits of Inflation suffer from both the missed or diminished attribution of “cause and effect” and the proper perception of the value that can be derived from it. To contort a well-known quote: “This Inflation is not the one you are looking for.”

In looking at Inflation, we see a rise in price. We don’t always know why the price increased but there is always at least one reason sometimes several. But let’s step back and look at the big picture. Somewhere in the process(es) that make the product/service that you are buying there is something that is causing the cost / price relationship to change. The thing that changes may be the cost of the material it is made from. It may be the cost of the workers who produce the material, fabricate the goods/parts that it is made of, or assemble it into its final for sale product. It may be the cost of fuel to run machinery or transport the goods, even the capacity of shipping ports or trucks, or to keep them at the right temperature. Let’s call theses causes: Type A – Supply Issues.

At this point, you know that there is another Type coming. Prices can also go up because you can make more profit if you charge more. In basic economic theory this a consequence of the supply-demand model. When demand increases and supply doesn’t increase to meet it, suppliers raise their prices because consumers will pay. This ‘scarcity’ effect can be due to there literally being no more of the supply available or that the ability to product more supply is limited by some part of the process which creates the product. You can’t grow more of the annual apple crop this year no matter how much demand there is for them. It doesn’t matter what caused the apple crop to be limited or the demand to be what it is. There is only what there is. Each apple becomes more valuable as long as consumers will keep paying more. Type B – Scarcity.

If the conditions are right, the supplier can raise the price just because they believe they can make more profit at the higher price. This only works if there is insufficient competition that the consumers are aware of.  Type C – Lack of Competition.

These different types of supply conditions create the necessity or opportunity for Inflation. And they also create the opportunity for how Inflation can produce benefits. With increased prices there are openings for someone to seize an opportunity to address one of the ‘causal’ conditions which creates a counter-response to the side of Inflation that we don’t like. Investments can be worth making in infrastructure or in production facilities, new fuel options can become cheaper than older ones, farmers can choose to plant more apple trees or to increase yields via new varieties, and entrepreneurs may enter the market and produce the equivalent or better products at lower prices. And the opportunity that Inflation creates may focus investment in research and innovations that alter the market for the product from marginally to completely out-competing it and replacing it in the marketplace.

Most of these benefits of course are less rapid than the conditions that sparked them; but there is no doubt that Inflation can be and is a significant factor in prompting efforts to counter its negative impacts. Yes, too much Inflation is bad mostly because the systems that have to respond to it are not able to adapt fast enough to avoid disruptions and problems for consumers but how much progress would have never occurred or been substantially delayed because it was too low?

These benefits are, I am sure, of little comfort to consumers today because they only feel the discomfort and frustrations. Perhaps we should consider how much our Consumer-driven economy mimics the answer to that awkward sentiment: “If you want to know what the problem is, take a look in a mirror.”

 

National Debt-Ceiling – The US’s Political Game of Chicken

Last week the Democrats and Republicans came to an ‘arrangement’ (an ‘agreement’ might be the impolitic term to use) to defer the resolution of the 2021 National Debt-Ceiling crisis by two months until second week in December. This means that they effectively increased the Debt-Ceiling sufficiently to bridge that “gap” of time. The problem itself is not really solved at all, it is just “kicking the can down the road” as almost everyone in the media is stating.

However, while Kicking-The-Can-Down-The-Road (KTCDTR) is a very typical political strategy for dealing with an issue that cannot be forced by one side because they control sufficient votes in both houses of Congress or they don’t have sufficient bi-partisan support to pass their decision. Since the Republicans chose what they see as a politically good strategy to improve their 2022 election campaign prospects, the Democrats cannot easily get approval for increase the Debt-Ceiling. It doesn’t matter that this is a pretty standard item to get approved with bi-partisan support, the Republicans see advantages for them to provide none. This is what politicians do.

While the deferral to December is a described as KTCDTR, a more appropriate analogy for the current maneuver is a game of “Chicken”. Whichever party or sub-group of politicians is trying to gain some advantage(s) in negotiations on the Debt-Ceiling issue, the strategy is basically playing “Chicken”. Whoever blinks, jumps, or calls uncle first loses. Sometimes no one ‘blinks’ and there is no winner and the public receives the “prize” which results from not getting the issue resolved. The “prizes” in the past from not passing Debt-Ceiling increases have not been good for the US or the public. So, the game of Chicken is still very much the right context to consider in the current crisis or the Christmas present crisis that is now to be anticipated.

The Democrats’ problem and thus President Biden’s is that without a couple of Republicans providing support in the Senate, they can’t just pass the increase which has been the standard and very simple solution. The Republicans have pushed the Democrats to the brink and believe they have a win-win situation. No matter what happens, it will be Biden’s and the Democrats fault for whatever happens.

Now, there is a solution for the Democrats, particularly for President Biden which solves their problem. It is a fairly easy solution in fact. That the counter to the Republican’s strategy is easy means that the leaders and members of both parties have done a bad job of problem-solving. The Republicans picked a strategy which is trivial to counter and turn the table on them. The Democrats haven’t been able to solve the problem the Republicans created which doesn’t speak well to their political skills either.

Someone is going to ask, “Well what is the solution, bright guy?” And the answer is that just look at the game. It is a game of Chicken. So that should provide a sufficient context to let you find any of the rather self-evident three solutions that are available. With a little savvy strategic planning, a very beneficial strategy can be had. Whether anyone in the Democratic party can find one of the solutions, we will have to wait and see; but they did not find it the first time around and have had to defer the game of Chicken until December.

Perhaps the solution isn’t so obvious to politicians or political operatives. They may not have mind-sets that are amenable to this type of problem-solving, if any type. Politicians nor their advisers may be all that experienced in strategic problem-analysis or solving. If their obstacle to finding a solution is their deficiencies in the skill-set, competencies, and knowledge for problem-solving methodologies then they may have to resort to the basic method that businesses sometimes use when they are unable to figure out how to solve a problem facing their business; hiring a consultant(s) that can lay out the options and even recommended a particular strategy.

Facebook's Terribly Hard Problems With Very Easy Solutions

Today’s CBS Sunday Morning segment on Facebook’s misinformation risks/dangers presented yet another assessment that there are severe societal problems that Facebooks has not just revealed but which it and other social-media platforms have enabled and empowered. Your piece used the COVID pandemic’s plethora of misinformation as it’s central focal point, but it has long been known that social-media has wrought a wide variety of harmful ills with the ability to spread more easily, broadly and dangerously.

Even the researchers on social-media’s impacts on society presented yet another societal problem which Facebook creates. Facebook may have the ability and right to restrict and block anyone they choose that might be investigating the ills of social-media or of the corporations which provide or profit from social-media but that just adds to an already long list of enabled problems. While Facebook doesn’t deny in total that there are problems with their platform or with social-media in general, they insist that they are working diligently to address and overcome these problems. Facebook also notes that this isn’t easy to do and that they have an obligation to their users, clients, and the business to not engage in censorship or other practices which would be wrong or illegal. Even the researcher talked about how difficult the problems that Facebook is enmeshed are to deal with and solve. This is where I fall off the log.

I am aware that Facebook and other social-media entities have claimed that the problems which are of grave concern or are just seen as minor annoyances are very hard to resolve. They even take credit and pride in stating how much time, effort, and resources they are ‘pouring’ into handling and correcting these problems they are investing. Facebook actually created an “Oversight Board” to monitor their performance in applying their standards and procedures properly, fairly, and effectively to prevent grave abuses by any Facebook users who are violating those standards. Technology experts, journalists, and reports also present assessment of the problems and the technical or business challenges and difficulties that need to be overcome to resolve any given problem area. And of course politicians, who provide no substantive value or comprehension of the problems or solutions to these problems, are also chiming in about the critical, urgent, and responsible need to ‘fix’ these problems. Note: As with anything that politicians are engaged with, there are opposing views of what the problems are since some problems exist only in the ideological views of the politicians as a fund-raising theme.

But what if the difficulties that Facebook, Twitter, YouTube, Google, Instagram, WhatsApp, … and other platforms providers, technology experts, social-media researchers, journalists, politicians, and the public at large are wrong? Is there a Law of Physics which requires that the solutions to the identified ills, abuses and problems with social-media are difficult? Is there some technological capability which is not yet within our grasp or competence to use in resolving these problems? Does the business or profitability model of social-media depend upon the very abuses and problems that the general public agrees need to be dealt with and solved? I suspect that many, maybe most if not all, think that none of the problems have relatively simple solutions or available solution strategies. However, there is no Law of Physics that prohibits this, there is no technical barrier to be breached, nothing about the social-media business eco-system or profitability model requires these problematic attributes to operationally persist. It may be the case that perception is reality in this context but then all that needs to change is one’s  perception and then “poof!” the reality is that these problems can be solve. And, they can be solved today; without a key breakthrough in technology (e.g. some advance in Artificial Intelligence capabilities); without a huge or even significant investment of time, effort, or resources; and without the need to sacrifice one’s business mission or profitability. In fact, solving these issues can be highly valuable to the social-media entities and to their clients and users. There of course may be some who don’t benefit, like politicians who won’t be able to raise campaign funds on these issues or they will not be able to legislate solutions which either utterly fail or make the problems worse.

So, why is it just accepted that there are no good solutions that are available? The answer to this problem may be that no one has asked the rather simple question: “What are readily available methods, approaches, strategies, and options for dealing with the [fill-in-the-blank] problem on Facebook (or any social-media platform)? The COVID Misinformation problem ought to have provided an excellent opportunity to ask this question, and Facebook should have at least one innovative designer or problem-solver who could have presented a dozen or more solutions that could have been and could still be implemented with little difficulty. Social-media experts and researchers should be able to present some insightful solutions. Journalist, reporters, and news media entities should have found someone who can explain the simplicity of solving these issues. I would say what politicians should have been able to do except, well: politicians!

If Facebook is serious about addressing these problems and haven’t found solutions that will work, have they done what any good and well-managed company would do when stumped by a business problem? Have they asked for help?

Transitory Inflation: Is It Sticky Notes or Cast Iron (Part 1)

 

There has been a growing volume of discussion on “Transitory Inflation” around the US’s COVID-Recovery. One might say: Almost an inflationary amount of media coverage on the question of what will happen in the US Economy. Some, like the Fed and the Treasury, are espousing the view that the up-tick in prices/costs that have come with re-opening the US economy are ‘temporary’ or ‘transitory’ and due to conditions related to the pandemic and due in large part to the supply-chain disruptions occurring simultaneously with rebounding consumer demands. Of course, there are those, like some financial industry leaders or economists, who assert that these inflationary price/cost increases will persist and will not be ‘transitory’.

Yes, I know; what a shock that there are different projections about inflation and from those who’s views on the economy are supposed to be most informed. That the ‘most informed’ are interpreting the same state of affairs differently would seem illogical; but this is more common than one might think. This of course raises the question: Who’s right? And that is where the answer is much like the economy itself. The economy isn’t simple, it isn’t preordained to react in a highly deterministic manner based on a numeric measure which is well understood in the context of economic theory; but which is abysmally poorly defined in the practical terms of reality.

Who doesn’t know that ‘Inflation’ is “a general increase in prices and a decline in the purchasing value of money”? Some will say: “the cost of goods increases”. Now as to who doesn’t know that, well it is not clear but if you asked a systems analyst, they might say that these definitions are not adequately defined in that they doesn’t tell you what happens because of those conditions. Now, if we add the complicating notion of “transitory” to the mix, the picture doesn’t get any clearer.

Let’s reset the discussion. First, let’s attempt to define “Inflation” a little more specifically. This doesn’t mean that economists or financial experts will agree, but they already don’t so what do we have to lose?

A general and useful definition of “Inflation” is:

The price/cost of some item or items (henceforth call ‘goods’) increases, while the following conditions are also true.

Conditions:

·         The value of the money, capital, wages, assets, or any other items unrelated to the goods, whose price has increased, have remained unchanged.

·         The consumers/customers of the ‘inflated’ goods continue to purchase these goods at the higher price/cost.

·         The level of supply of the goods and the level of demand for the goods must be measurable/quantifiable as variables in assessing the impact that this ‘Inflation’ will produce in the economy.

·         Open criteria: yet to be determined conditions which are needed to produce the consequences of these goods’ inflationary impact.

This is a more useful definition of ‘Inflation’, at least from a systems analyst’s perspective, because it allows for a more calculable way to derive consequences.

I want to point out at this juncture, that this is the simplest example of Inflation, and it may also shed some light upon what adding a ‘transitory’ factor or dimension to Inflation would require.

So, what does this definition of Inflation tell us?

First, it tells us nothing about what caused the price/cost of the goods to increase. Basic economic theory indicates that the price/cost of an item will increase due to any number of factors:

1.       The Supply/Demand principle indicates that price will increase if ‘supply’ is inadequate to meet ‘demand’. So, if supply decrease then price will increase as long as demand remains that exceeds the available supply quantity. Or, if demand increases but supply does not respond to adequately meet it then price will rise.

2.       On the opposite side of the inflation coin, the price/costs of good can decrease if ‘supply’ exceeds ‘demand’. This is the counter-part to inflation; it is deflation.

3.       Price may also increase even if supply and demand themselves are not actually relevant factors at play. If the ‘producer’ of the goods sees or thinks that they can increase their revenues and profits by raising prices, then that would create an inflationary force. This decision by the producer is a risk. As long as there is a reasonable level of free-market competition then the assumptions is that competitors will gain market share as long as they offer lower prices/cost. If the free-market concept doesn’t operate efficiently then some level of inflation occurs.

4.       There are some bizarre or outlier situations which create an inflation-like effect but have a dubious connection to the economic principle of a “rational consumer” which renders explaining or modeling the effect and projecting it somewhat difficult to achieve. An example of such an economic event is a fad. If a good becomes a ‘fad’ item then its price may well become detached at least for a period of time from a real supply-side constraint.

Taking the conditions which define inflation together with the factors that create the underlying price/cost changes provides a way to assess and project impacts from inflation on an economy.

Before we go further, it is important to recognize a relevant aspect of the economic concept. There is an assumption which needs to be acknowledge that often goes unstated. In discussing any economic concept there is a finite amount of funds that exists within the consumer population. This finite amount has a meta-reality to it, because while it is finite it is not fixed. This may seem a contradiction, but it has to do with what constitutes the underlying ‘value’ of things in the economy (or the world). Resources are constantly changing and with those changes their value may change. This aspect of value doesn’t usually change for individual consumers that frequently or rapidly; however, it can change in broader contexts. Take as an example: corn. The cost/price of corn doesn’t usually change that drastically unless some event causes a very extensive change in the entire market for corn or on something that corn production relies upon. An individual consumer’s decision about corn, to buy or not, has no real effect; whereas if a significant number of consumers alter their buying decisions their collective impact could change the ‘value’ of corn and thereby have an impact upon whether inflation or deflation happens.

What then is creating the current Inflation during this initial period of the US’s COVID Economic Recovery? Well, there are many of the factors mentioned above that are at play.

A.      Supply:
There are innumerable goods that are not available in quantities to meet consumer demand. So, the producers raise their prices because there is a willingness and tolerance among enough consumers to pay higher prices for the same goods at the inflated prices. Consider just a few of the goods that have made the news while there are likely multitudes more with less media attention:

a.       New Cars/Trucks

b.       Used Cars/Trucks

c.       Lumber

d.       Energy: Oil, Gasoline, natural gas

e.       Housing – new, used, rental

f.        Food: especially fruits and vegetables

g.       Food: restaurants, fast-food / take-out, away from home

h.       Airline tickets

i.         Medical expenses

j.         Something you know of perhaps

Then there is the Resources dimension of Supply that are associated with the production or procurement of the goods. The COVID pandemic also impacts and continues to distort this part of the Supply side. This facet of Supply includes things like:

a.       Workers. Perhaps the most dynamic and diverse resource. One of the reasons there are Supply problems in goods is that to get the goods into the market/economy you must have workers that are a key component in producing the Supply. Someone must make the parts and assemble them to have a new car. Someone must harvest material: food, lumber, petroleum, minerals, … . Someone is needed to take your order and deliver it to your table; or issue your boarding pass, and of course fly the airplane. You even need someone to sell you what you buy at a store or have delivered to your home.

b.       Materials. Along with workers there are the substances/materials that those workers are needed for acquiring, producing, and distributing. That new car needs the materials which all of its various constituent parts require.

c.       Capacity. When the need for supply increases for whatever reason, there are constraints imposed by how ‘responsive’ the production process is or can be in reacting to that need. How much production capacity exists limits how much can be produced no matter if you have more than enough workers, more than enough materials, and more than enough money. The time required to produce ‘X’ units may not be within your ability to change or control. The number of units that you can push through the manufacturing process at some number can not be increased. The amount of things that you can move from where they are to where they need to be is dependent upon literally how much space there is for the processes that move things.

B.      Demand:
This ought to be the easiest part of the Economy to both relate to and to understand. Demand is what everyone buys. Every purchase that you make from the smallest five-cent piece of candy at the check-out register (for those of you who have every been in a physical store), to signing the mortgage papers when you buy a home, to buying a seat on one of the commercial space-flight ventures; and everything in between. Demand is transferring some of your financial resources to someone else in exchange for those ‘Goods’ that they offer in that exchange.

So, what does all this mean for Inflation?

It is actually quite simple, if you are comfortable with the concepts of Supply and of Demand and how they interact then Inflation is just a process consequence that works to find a point of economic (monetary value) stability. Hopefully, you have seen a Supply vs Demand chart that relates the cost/price of goods rising or falling as these two factors change.

Inflation is just a response due to consumer behavior. The ‘transitory’ aspect of inflation thus is exceedingly dependent upon the same Supply / Demand  relationship in economic theory and thus upon the same consumer behavior. How to understand the Consumer-behavior aspect of Inflation and the ‘transitory’ question around the COVID-Recovery Inflation will be discussed in Part 2 of “Transitory Inflation – Is It Sticky Notes or Cast Iron?”

Hoping My Deer Killer Reputation Is and Remains History

 

When you tell someone that you hit and killed a deer, you will get several different reactions but almost always someone will tell you about their own incidents or near-incidents with deer. Every driver who lives anywhere where deer are occasional road traversers will have seen deer on, next to or crossing a road. It is also highly likely that these drivers will have seen the carnage left on deer and cars alike from the frequent interactions between members of the herd and varied vehicles. These “let me tell you what happened to me” stories about deer encounters of the frightening kind are modern variants of the “fisherman’s tale” along with their one-upmanship enhancements. It is a strange and perverse form of accomplishment for drivers, akin to the “one that got away” stories except that it takes the “didn’t get away” fatal plotline.

My story isn’t solely about one particular ‘car and deer’ collision. No, I have a sequence of encounters which earned me the appellation of “The Deer Killer” at work. This title resulted from commenting to some colleagues at lunch that I had had a near-miss with a deer when leaving from our work location one day. On that occasion, the interaction between my car and the deer was of the most minimal nature. Upon seeing the deer bound out of the foliage and into the road ahead of me, I slammed on the brakes and the car bumper just clipped a back hoof as the deer passed with no meaningful harm done to either. Now this is not an especially dramatic or noteworthy deer story; but it did bring up the afore-mentioned one-upmanship competition.

The lunch group heard about a range of story lines dealing with different contestants’ various offerings of their harrowing confrontations betwixt car and deer. After we had heard the stories about:

·         A deer jumping from the roadside right in-front of the car

·         A deer standing in the road around a curve

·         A deer bolting from behind bushes in people’s yards

·         A herd of deer running onto the road and hitting one or even two

Most of the stories were some version of these themes. They may have happened at night, in the morning or during the day. Stories took place in suburban neighbors, around farm fields, in wooded areas (like around the building I worked at), or on heavily traveled highways. There were stories of the does and the many pronged bucks woven into the mix. The vehicles spanned the gamut of new to old,  of large and small, and truck to family auto. The intensity of impact and its resulting damage also covered a wide spectrum of outcomes, both for deer and vehicle. After hearing each of the others’ adventures with our indigenous fauna of the bumper, I though I may have the story that ‘one ups’.

At an opportune moment of silence, a rare incident indeed at the lunch table, I calmly asked: “Who has hit the same deer twice?”  One of the quicker skeptics asked with an incredulous tone: “And how do you know it was the same deer on those two occasions?”  Everyone took on the same expression of doubt. “On no,” I said, “I did not mean on two separate occasions, I meant twice on the same one.” I went on to explain.

I was driving from graduate school to my future wife’s house to fetch her to a party that the graduate students were having during the holidays. Most of the route was through state forests or undeveloped land. It was a late fall evening and dark enough to require headlights. There was next to no traffic on the road, so I was making a good run in the rather dated Volkswagen I drove at that time. The first thing I saw was a rather large brownish form immediately in front of the car’s windshield descend from the right side of the road. I hit it dead on. I slammed on the brakes as fast as my brain could react.

This is where the event gets unique. The deer hit the hood and was driven straight forward and a little up in the air, just enough that it landed on its legs just in time for my car to hit it dead on again. I can’t say which hit killed the deer. But when the deer and the car came to a stop, it lay in front of the car and did not move. The visual memory of the collision is quite vivid. I got out of the car to see how much damage had been done, to see the state of the deer, and to determine if I was going to be able to drive the car.

Fortunately, for me given the circumstance, I was able to bend the right front fender up and away from the wheel thus allowing me to be able to drive; albeit with only one headlight intact. I pulled the deer off the road and then my car. Not to long after the accident, a passing truck stopped. The driver asked if I was alright, and I indicated that I was fine. He then asked me what I planned to do with the deer. I was a little taken aback and said that I was just going to report the incident (it was required by law to report hitting a deer and its location). The man asked if he could take it, and I said that was fine with me. He then invited me to come to his house when I was able to have some of the deer. I helped him load the deer in the back of his truck and thanked him for stopping to help.

That story seemed to be the winner, but it wasn’t for that story that I earned the dubious title of “Deer Killer”. There were some additional deer-involved incidents that occurred over time. These occurrences would also get related to my coworkers from time to time. Remember the one at the start of this sage, the deer running out of the woods at work. Well, there was also one where a deer jumped out onto the road (again from the right) during a drive into work where I hit the hindquarters of the dear. The deer kept running after it recovered from skidding over the road. I was hurt enough to prevent it from running but did not seem to be running normally. Then there were at least two times when I was driving home from work on one night and volleyball on another where I saw the deer standing by the side of the road in someone’s yard. It was only when I got close that each deer bolted right out into my car. One died, the other I don’t know what happened after it hobbled off.

There have been a couple of near misses. Somewhere along the line, it was suggested that I had developed the reputation in the deer community for being “The Deer Killer”; and any deer that wanted to commit suicide would come looking for me. I decide to write up this narrative when returning from a night of summer evening volleyball, I passed three separate locations where there was a deer just off the road that looked up as I approached and passed. Fortunately, none of these apparently knew my reputation or where in a death-wish state of mind.

I am hoping that I won’t be able to add any future ‘tails’ to my story.

School Choice in the Age of COVID: The Mask Issue

 

With the recent recommendation(s) for mask wearing in US schools for the 2021 Fall openings the arguments, fights, debates, and political / partisan divides over this particular issue could help provide a reasonable path forward for competently addressing these disputed among different groups. This is particularly true for states that have passed legislation or had official mandates issued to prevent school districts from ‘requiring’ mask wearing in a public school. Now from a public policy perspective there is never going to be a single public policy agreed to and an accepted resolution in any state. In a large population it is just illogical to expect there is going to be a sound and reasoned policy accepted by public who cannot agree on anything.

However, this irreconcilable difference in positions may actually offer what would seem to be the obvious solution. Why need there be a ‘single’ school solution that must be imposed upon one side or the other? After all, there are other options and solutions that might not only be agreeable to all parties but which provides additional benefits to the schools, the states and the nation. Wouldn’t it serve the public’s interest much better if rather than spend the time, energy and resources fighting over who’s rights and freedoms, and who’s political alignment is being supported to have a solution which satisfies the positions taken by each individual family and the schools and state/local leadership? If not, why is it essential that the interests of some must be sacrificed at the expense of others?

As to the solution I would think it would be obvious to politicians or school administrators. Implement a two-choice voluntary system. Let individual families choose whether their students attend a class where every student wears a mask, or they can choose to attend their class with students who do not wear masks. This selection would be applied across all aspects of the school. This would require that the schools plan and organize the execution of the school programs and class around this separation scheme. Who doesn’t get what they want if you just operate along a principle of let each family choose their own level of risks.

Another advantage of this dual-track approach would be that it could even accommodate a Vaccinated and Unvaccinated dimension related to the families’ adults. Of course, the Vaccinated vs Not Vaccinated dimension may almost perfectly align or overlap with the mask versus no-mask dimension.

From a public health policy perspective, this voluntary choice policy would enable the healthcare entities to gather data on the efficacy of the two choices. Since each group would have made their choice based on the same information and recommendations that have been made available by the experts there is no reason that the schools or government should be held accountable for those choices and any consequential outcomes. It’s a perfect solution. Everyone gets what they want and any consequences are within the scope of their choice.

Bipartisan Infrastructure Bill: These Are Not the Taxes You Are Looking For!

 

There is an interesting facet in the Bipartisan Infrastructure Bill (BIB) that a group of five Democrats and five Republican Senators are proposing to ‘break’ the typical impasse between Democrats and Republicans in Congress on anything. As an attempt to ‘compromise’ it is a rather modest, at best, effort to achieve even the desired ‘pure’ infrastructure efforts proposed by the Biden Administration and Democrats. The ‘new’ Infrastructure items are absent in toto. But within the BIB is a small item that is included as an “option”. That option is to provide an ‘inflation-based indexing’ of gasoline taxes.

So, to accommodate an essential inviolate Republican ‘line in the sand’ the BIB is presented as a “no new taxes” bill. This is a common tactic among politicians, they use their phrasing and personal interpretation as to what anything ‘is’. Just the simple term “new” is highly nuanced. What “new” means is actually very important. Consider if I were to propose that I was going to build a dam but that ‘no new laws of physics’ were going to be used, what would that prevent me from doing? I still get to use all the ‘existing’ laws of physics. So, a promise of “no new taxes” only prevents the use of a tax that doesn’t already exist. What does it allow however?

This is where that pesky personal interpretation could come in, and in fact the Republicans have wedged in at least one such view. The Republicans seem ok with the use of an existing gasoline tax. After all, it is not a ‘new’ tax. Now, because that ‘sleight of hand’ maneuver is just to easily something that the public (even voters) can readily see as disingenuous the BIB provides it as an “option” that can be used. Wow! I feel much more that there are “no new” taxes now. But there is a second-order tactical evasion included in the “no new taxes” optional funding mechanism. The ‘optional’ “no new” tax is only applied as a “inflation indexing” adjustment. The ‘not new tax amount’ that might ‘optionally’ be used is simply to adjust the current gasoline tax-rate to account for Inflation. So, it is really not “new” but just an ‘adjustment’ because the increased amount of money that users will have to pay is only because if ‘Inflation’. Just like the dam I am going to build won’t change the flow of water because I only used the ‘existing’ laws of physics!

Now, you might think that we have covered this taxation issue pretty much completely. Except what about the reasoning* behind this ‘not a new’ tax notion beyond is it ‘new’ or not? [Note: * I am asking the reader to apply their ‘suspension of disbelief’ skill to the notion that politicians reason.] What about some other factors and considerations that we have to hope politicians think** about when proposing and crafting legislation. [Note: ** Just like first note, lets assume politicians think.] For example, who is being taxed? And, who benefits from the taxes? Oh yeah! What makes this approach ‘fair’ and ‘equitable’?

Who would be taxed? Well, it’s a gasoline tax; so, people who drive cars on the roads and bridges or who use gas in boats or other gasoline-powered devices like backup-power generators for instance. Well, everyone drives a car right? So, that makes it fair. Except even if millionaires and billionaires drive a car, is the cost of gasoline for them a ‘fair’ distribution of a tax policy? They don’t dry more than anyone else really, probably less actually. However, why are people driving vehicles on roads and over bridges?

We drive cars (and truck and such), for all the usual reasons. To get to and from work and school, and in the fields that grow our food. Cars are used by those whose jobs are in the transport industry, be that transport of produce, goods, or people. Folks use cars to go to stores in order to procure anything from food to furniture. We also use cars to go to entertainment events and take vacations; but this category of use is at a lower quantity than those above. We are thus taxing virtually everything in our economy and spreading that tax burden over everyone to the degree that those activities are part and parcel of their lives, life-styles, and economic rung.

Now, if you assessed how much everyone is taxed; how you measure that is quite significant. Is the amount of tax you pay fair compared to someone who makes half of what you do? How about compared to someone who makes ten, hundred or a thousand times what you do? If you think this is fair then there is a far better, cheaper, and more reasoned way to do all this without a gasoline tax. Wouldn’t it be better to have a cheaper way to obtain the same tax revenue? If you don’t think this is ‘fair’, then a gasoline tax approach is problematic, isn’t it?

What about who benefits? That should be a pretty easy answer. Everyone. But does everyone benefit equally or more precisely do we all benefit in what would be a consistent ‘fair’ manner given how the taxes are ‘fairly’ applied? We all get to go back and forth to work/school (unless you work/school-at-home). Farmers get to farm, truckers/deliverers/drivers get to truck/deliver/drive, customers get to purchase, and we all get to go out and enjoy as we choose. But once again there is that nagging question of did you benefit just like the person who earns half your salary, and just as much as those who earn ten, a hundred, or a thousand times what you earn? There seems to be some form of asymmetry happening here just like there was in the amount of taxes paid by everyone.

Is it possible that those at the top pay in relatively little but get out a much greater benefit? To be honest, this is an overly complex and difficult question to answer because it involves so many other factors and considerations. But has a quite real regressive, even repressive, attribute on putting more of the burden on those in the lower economic tiers than those in the top tiers. Consider corporations as some of those ‘persons’ at the top. They pay their mileage tax costs and any derivative gasoline-tax costs that flow-through to them and then pass those along to their customers. However, these same corporations earn their revenues from their customers who are paying for those same taxes in the prices they are paying the corporation for its goods. Their profits can be the same in an absolute sense, or even higher if they earn the same profit percentage on a higher priced product.

It is a difficult situation to determine what it mean to be ‘fair’ in with regard to a gasoline tax policy and structure.

So, when the politicians tell you, “These are not the taxes you are looking for” be very skeptical. These may be exactly the taxes you are going to pay.