Supply Side Economics Works-See School Choice

Demand Driven Economics is a Total Fail

One night in Vegas a great old friend and I were chatting about school choice. He made an excellent point. You can pass all kinds of legislation, and even allocate money to it, but since there is no infrastructure there, there is no real opportunity for choice.

I didn’t have a response. I didn’t have any data to back up any answer that I could have made. It would have been pure conjecture, which is about as good as a lot of political arguments that are made today.

If you live in a rural part of the country, please send this blog post to your local legislators.

In Georgia, it was rural Republicans that killed school choice. They didn’t do it out of principle. They did it out of fear. When their towns wake up in the morning and look at the world, there is a public option, and there might be a parochial private option. There isn’t some independent school network on the ground that their constituents can apply to today.

One thing I have learned in life is free markets are messy but eventually, they get to the right answer given the freedom to get there.

I remember a mentor of mine was a massive trader in Eurodollars. He decided to retire. People on trading desks, and in pits wondered who would fill the void. The answer came on the next opening bell. There were people that stepped in. Of course, to my friend’s point, the infrastructure was in place.

How does this relate to school choice? We have a classic chicken and egg problem. You can give people money to spend, but if they can’t spend it, what happens?

That’s looking at it from a demand-side economics perspective. “We will build inventory, and hope that people buy it.” If they don’t, we will pass subsidies and tax breaks to incentivize the use. See the green energy economy for all the evidence you need of demand-side thinking. No one actually wants that crap because it doesn’t work at scale and it’s expensive and unreliable.

For what it is worth, mathematically and statistically, demand-side economics has a lot more variance than supply-side economics which makes it more expensive. The world just doesn’t work that way. Supply-side economics more actively looks like the way humans and businesses actually interact and operate in the world. There are no business degrees for demand-side management.

It’s why communism fails from the moment it is implemented.

Demand-side economics also relies a lot on some smart central planner to figure things out for everyone else. Ask the Chinese how that “Great Leap Forward” worked out for them. Today the state of government-run public school education in America is central planning. The result is all kinds of crap that no one can control combined with kids learning less and turning out totally unprepared for the world that confronts them. Kids that were educated in the 1930s and 1940s would have a better chance in today’s world. Why? They were rigorously and classically educated which teaches you to think critically. Please read Erin Geary’s column today about what the central planners have planned for Chicago. The governor of Illinois sends his kids to the Latin School of Chicago but he’s making it impossible for citizens to be enabled to have the same choice.

The supply side is very different and what is better is it enables people to be free to choose. It creates and moves competition along, which is great for innovation. Supply-side economic thinking is a direct threat to central planners in both political parties.

This is why teacher’s unions, Marxists, bureaucrats, and Democrats fight so hard against school choice despite the fact that well over 60% of parents want it. Besides, when you delve into the data, kids that go to private schools do better than kids that go to public schools. People aren’t stupid and see it. They want a shot at the brass ring too.

America started public schooling to try and educate people because it was good for our country. We had a lot of illiterate people running around. Guess what? Now that the process of government-run public schooling has become the Industrial Education Complex and totally controlled by unions and the hard hard left wing, we have a whole lot of illiterate people running around. We have gone full circle and it’s costing us not only a bundle in government budgets but an even larger amount when you look at the opportunity costs of having an uneducated population that cannot critically think.

Hence, at the state level, legislators need to pass a school choice program. Any program. Fund it. Build on it. Get that foot in the door. The first thing that happens is it creates competition with the government-run public school system which is a core tenet of America. Competition makes everyone better. The second thing it does is enable freedom of choice by empowering parents. All of a sudden, they have money to allocate. They will allocate it to the best return on investment based on the way they see it for their children. No one ever wants worse for their kids.

Herein lies the great part. Competition+Empowered Parents allow innovative schools to start anywhere in the state. They will start in rural areas, suburban areas, and cities. Rural areas offer some incentives because rent/land and things like that are cheaper. Rural legislators need to ignore the fear-mongering of the teacher’s unions who are only in the business of securing and expanding jobs for teachers/administrators, not teaching and securing the future of children.

Now comes an even greater part. Data. I pulled this from this WSJ article.

A recent Heritage Foundation report points out that in Florida and Arizona private school enrollment has increased in rural areas since the expansion of school choice offerings. Families in any region can also teach children at home or take advantage of online classes.

The Heritage Foundation found that when you enable school choice, magical things happen. The free market takes over and utilizes supply-side economics to do its work. It doesn’t matter that there is no existing infrastructure in place.

States with robust education choice policies have seen a significant increase in education options in rural areas.

Expanding education choice does not harm rural school districts. Indeed, the best evidence suggests education choice policies spur rural schools to improve.

This is huge and puts a gaping hole in the argument the teacher’s unions are trying to fly. It also is an answer that is data-based for my friend who believes in school choice.

Republicans, what the heck are you afraid of? The unions aren’t going to support you in the general election. They hate your guts despite their smiles at you for voting against school choice.