Lawson for Congress

The Internet is abuzz with a video of Ron Paul “rejecting evolution”. Check out this blog post, the video, and the outraged comments. Now watch the video again, carefully. Notice how the video jumps at 31 seconds? Someone has cropped this video to make a point, and leaves us with a few sentences taken out of a presumably broader context.

Was this editing done out of respect for your valuable time? Or was someone being disingenuous, and attempting to paint Dr. Paul as indistinguishable from, say, Mike Huckabee?

I don’t pretend to speak for Rep. Paul, but please. He is a scientist, with a healthy respect for the scientific method and the need to reject the null hypothesis. I’d love to hear the context he provided outside of that hacked-up editing job, because issues as deep as how life began cannot be dissected in fifty seconds.

Like Rep. Paul, I also graduated from Duke Medical School. From anatomy to physiology, the diversity and magnificent complexity of life is astonishing. Statistically speaking, what is the likelihood of all this spontaneous order evolving out of the primordial soup, when my three kids can’t keep their rooms clean? If one respects physics as a foundation of science, entropy typically has the upper hand over spontaneous order. This article (thanks to Lew Rockwell) is a great summary of some of the problems with evolution as the sole answer to how life began.

For me to address this question, I first have to ask what you mean when you say “evolution”. Is “evolution” the all-encompassing process by which life began and reached its present observable state? If you define evolution as how life began and then evolved into its current state, I don’t believe it either. The evidence just isn’t there.

If, however, you define evolution as an ongoing process by which organisms adapt and change both spontaneously and in response to their environment… now that’s a definition of  “evolution” that is supported by evidence.

So how did life begin, and was God in charge? I don’t believe science can tell us. All science can do is describe the world around us. We can describe it from astronomic to subatomic levels, but we’re simply describing what we observe. At the deepest, most fundamental level, assuming that the “Big Bang” did occur, can you prove to me that there isn’t a loving God who whispered “let there be light” at that moment? Either way, it’s a matter of faith.

Too bad Fox News wasn’t around at the time. Then we’d know exactly what happened.

One of the themes in my “stump speech” is the rising cost of food. We have three children, but their growing appetites haven’t damaged our food budget nearly as much as rising food costs themselves. Take milk, for example. Regular milk now costs around $4 per gallon. Organic milk is now up to $5.50 per gallon, although we can find it for $5 if we’re careful.

There are many reasons for rising food costs. Here are just a few:

• Increased commodity demand on international markets: With Asia’s rapid growth and advancing standard of living, the price of various “inputs” such as energy, protein for feed, and food itself has risen.
• Our government’s own misguided effort to subsidize corporate agriculture with ethanol subsidies: Paying agribusiness to divert corn into energetically-questionable ethanol production raises the cost of feed and food for everyone, and subsidizes irrational investment in an ethanol industry that makes no economic or environmental sense.
• Debasement of our currency: This factor is the most painful to contemplate — it’s not just food, all commodities have gotten more expensive, and especially over the past five years. It’s not that the commodities are rarer or more “expensive”, our U.S. dollar just buys less stuff since we’ve printed and borrowed so much money in this age of fiscal insanity.
• Highly-regulated and anticompetitive markets: This factor is probably the most damaging to farmers, yet most within our reach to address.

Let’s take the milk example a bit further. A friend forwarded this Connecticut article that notes how dairy farmers are being squeezed out of business: while our retail milk prices are rising, revenue received by dairy farmers is actually declining! Even worse, given how dairy farmers’ costs are rising, more of them are being forced out of business as razor-thin margins are disappearing completely. This article from the University of Florida’s Institute of Food and Agricultural Sciences provides even more quantitative data on the similar dynamics in Florida:

The Dairy Business Analysis Program (DBAP) is a cooperative effort of the Universities of Florida and Georgia, Southeast Milk Inc., and Southeast (Dairy Herd Improvement Association) DHIA. This project annually surveys participating dairy farms about their revenues, expenses, and investments. The average of participating DBAP dairies (2005 data) showed a slightly positive net farm income of $0.09 per cwt., 4% return to invested capital and 1% return to equity. Revenues were somewhat ($0.50 per cwt.) lower than 2004, while expenses continued an upward trend inherent since 1999 and $1.00 per cwt. higher than 2004. The cost of inputs continues to squeeze producer margins. Labor costs in 2005 were an all-time high at $3.53 per cwt., 17.4% of total expenses. Feed costs were $7.50 per cwt, in 2005, 37% of total expenses and are expected to move higher in 2006 and 2007. These Dairies that participated in DBAP averaged 1,091 cows and sold, on average, 18,474 pounds of milk per cow. Assets per cow were $6,518, debt per cow was $1,862, and equity per cow was $4,032. Equity growth rate was 0.9%, slightly lower than the 1.1% annual average since 1995. Asset turnover rate was 0.8, lower than the 0.88 average of the eleven-year period of this continuing survey (1995-2006).

• Since revenues have increased more slowly than costs, it follows that margins have decreased. In fact, the average net farm income per cwt. was $1.22 for years 1995 thru 1999, but $0.73 from 2000-2005, a 33% reduction.
• Reasons for declining profit margins are several but one statistic that stands out from the others is capital investment. Total assets employed in the business on a per-cow basis clearly show that investments have risen substantially. In the years 1995-1997, total assets per cow averaged $3,721 compared to $4,357 in years 1998-2001 and $6,086 in 2002-2005.
• Since margins have decreased over time, yet producers have increased the assets of their businesses, the data suggest that assets are being used less efficiently. If this is true, the dairy farms would have had increased difficulty paying for new assets. Financial data supports this conclusion. Debt per cow averaged $1,381 in years 1995-1997, $1,400 in years 1998-2001 and $1,853 in years 2002-2005. Producers have leveraged their futures to provide new assets.
• Asset turnover rate (ATR) is another statistic that provides another method of analysis of the same effect (declining ability of dairy farms to pay for investments in new assets). ATR is total annual revenues divided by total assets. Thus, ATR indicates the ability of a business to efficiently utilize assets to generate revenues. DBAP average ATR in years 1995-1997 was 1.03, 0.99 in years 1998-2001 and 0.67 in years 2002-2005.

A 1% return on equity? Rising debt burden with shrinking margins? Talk about a miserable business. How can this happen in a “free market”?

Hint: the market is not free. This Web site, keepmilkpriceslow.com, details what independent dairy farmers have been doing to fight back against our government, agribusiness, and its food cartel. Put yourself in a dairy farmer’s position for a moment — imagine that the price you can charge for your product, in this case milk, is out of your control. There is really only one massive “cooperative” who will buy your milk, and just one massive bottler that will take your milk and put it into stores. The federal government tries to “help” by setting minimum prices at a level to “protect” you, but those prices are set artificially and can’t adapt to fluctuations in feed, fuel and labor costs.

What would you do? Most people would give up and sell the farm, which is an all-too-common occurrence. Thus small farms become a new strip mall or subdivision, or perhaps swallowed up by a bigger farm that still has the “economies of scale” to maintain its thin margins. A courageous minority of farmers, however, are trying to stay in business the old-fashioned way — by bringing a good product directly to the customer.

Think about it — the Connecticut article from January 2007 records a retail price of $3.92 per gallon, with just $1.28 paid to the farmer. Could you profitably put milk in bottles, pasteurize it, and get it to the store or a consumer for less than the $2.64 that the bottler, distributor, and store are currently charging? Of course! Should you be able to try? Why not?

Hein Hettinga is an an independent dairyman who built a business that allowed him to compete against the established corporate interests by bottling and distributing his own milk directly to stores. As a result of his success, Hein was rewarded by efforts to regulate him out of business and made to play by the same “rules” that keep the “dairy cartel” in power. Spend some time reading this Web site, as well as the commentary from the University of Florida article and other state/regulatory agencies. Ask yourself if the government is helping the people, or corporate interests.

When you’re ready to ask more questions about the role of government in the food industry, check out this interesting blog post from Pittsburgh where farmers’ attempts to differentiate their product are being squelched by a bureaucrat with an apparent conflict of interest. Finally, this article from Acres U.S.A. is classic, yet tragic.

We’re fortunate to have a local dairy that is breaking the mold and distributing its own milk. It’s not less expensive, but for some reason I’ve always thought milk tastes better out of a glass bottle.

I just finished reading this fascinating commentary in the Wall Street Journal about why an American military presence is essential in the Persian Gulf, compliments of Mr. Walter Russell Mead of the Council on Foreign Relations. Here are some favorite quotes:

While U.S. import needs are projected to grow significantly, U.S. dependence on Persian Gulf energy is not, thanks largely to expected production increases in the Western Hemisphere and sub-Saharan Africa. U.S. energy imports from the Persian Gulf are expected to remain below 20% of total consumption. The oil market, of course, is global, and if something were to happen to the Middle Eastern supplies, prices would rise world-wide, and the U.S. economy would be seriously disrupted. But domestic supply is not the key to American interest in the Gulf.

OK, excellent. So we don’t need to be there to secure our domestic energy needs.

For the past few centuries, a global economic and political system has been slowly taking shape under first British and then American leadership. As a vital element of that system, the leading global power — with help from allies and other parties — maintains the security of world trade over the seas and air while also ensuring that international economic transactions take place in an orderly way. Thanks to the American umbrella, Germany, Japan, China, Korea and India do not need to maintain the military strength to project forces into the Middle East to defend their access to energy. Nor must each country’s navy protect the supertankers carrying oil and liquefied national gas (LNG).

Wait… so our soldiers and tax dollars are paying to secure energy supplies for Germany, Japan, China, Korea, and India? Does that make sense?

For this system to work, the Americans must prevent any power from dominating the Persian Gulf while retaining the ability to protect the safe passage of ships through its waters. The Soviets had to be kept out during the Cold War, and the security and independence of the oil sheikdoms had to be protected from ambitious Arab leaders like Egypt’s Gamal Abdel Nasser and Iraq’s Saddam Hussein.

Oh, I see. So it really is up to us. Since we’re the ones who helped put Saddam in power in the first place, we had to clean up that mess ourselves.

But wait — does anyone really believe that widespread piracy and looting of supertankers would prevail without a U.S. military presence? Would the oil companies, shipping companies, sellers, and buyers tolerate such chaos? That’s a ridiculous assertion on many levels: there are other sources of oil outside the Middle East, and the countries in the Persian Gulf are highly incented to get their oil safely to market. After all, they can’t drink it.

The end of America’s ability to safeguard the Gulf and the trade routes around it would be enormously damaging — and not just to us. Defense budgets would grow dramatically in every major power center, and Middle Eastern politics would be further destabilized, as every country sought political influence in Middle Eastern countries to ensure access to oil in the resulting free for all.

Hmmm… but our defense budget would shrink. And we would not need to borrow as much money to finance our deficits from (gulp) Japan, Saudi Arabia, the UK, China, and our Federal Reserve. Finally, what exactly is a “free for all” in this context? The oil certainly isn’t free for all, or free for any. It will only be available to those who have a valuable currency with which to purchase it.

The potential for conflict and chaos is real. A world of insecure and suspicious great powers engaged in military competition over vital interests would not be a safe or happy place. Every ship that China builds to protect the increasing numbers of supertankers needed to bring oil from the Middle East to China in years ahead would also be a threat to Japan’s oil security — as well as to the oil security of India and Taiwan. European cooperation would likely be undermined as well, as countries sought to make their best deals with Russia, the Gulf states and other oil rich neighbors like Algeria.

Is Mr. Mead suggesting that our current world is a “safe and happy place”? The amount of global insecurity and suspicion today is already staggering. Even more ironically, Mr. Mead then implies that we’re keeping China on a short leash to prevent her from threatening her Asian neighbors, when we are actually dependent on China’s willingness to lend us money to defend her oil tankers.

America’s Persian Gulf policy is one of the chief ways through which the U.S. is trying to build a peaceful world and where the exercise of American power, while driven ultimately by domestic concerns and by the American national interest, provides vital public goods to the global community.

I strongly disagree with the assertion that our Persian Gulf policy is an exemplar for how to build a peaceful world. Talk about cognitive dissonance.

The most recent Energy Bill contains a most interesting provision: elimination of “inefficient” incandescent bulbs by the year 2012. Yes, that’s right: Thomas Edison’s invention will be outlawed (or, at least “inefficient” versions, as declared by the government) by 2012 in favor of the Next Big Thing: compact fluorescent (CFL) bulbs.

Don’t get me wrong, I like CFL bulbs. They’re handy for places where it’s inconvenient to change a bulb, and they generate a lot less heat. But there’s a downside, as well. CFL bulbs contain mercury, which makes a replacing a broken bulb a hazmat exercise. You can just choose not to worry about it, and one broken bulb isn’t going to kill you, but what happen when bulbs are breaking and/or being thrown away instead of properly recycled by careless homeowners all over the country?

Why is it the federal government’s job to replace an inefficient but environmentally benign light with an efficient but environmentally hazardous one? Who stands to benefit from the switch? Is this environmentalism, or is this corporatism? Well, this New York Times article quotes CFL bulbs as costing six times more while lasting six times as long as their incandescent cousins. That’s handy from the perspective of the light bulb manufacturer — with those cost and lifespan numbers, a nation switching to CFLs should be at least revenue neutral. And given the greater likelihood of bulbs breaking during their much-lengthened lifespan, one could reasonably expect even more revenue from CFL bulbs, since fewer will make it their entire useful life before breaking.

So the next question deals with profit, as opposed to just revenue. Which bulb do you think has higher profit margins: a widely-commoditized incandescent, or a sophisticated CFL with fewer manufacturers? I’d love it if someone had some statistics to share on this point, but common sense suggests that CFLs will be more profitable than incandescents, depending on the R&D and upfront manufacturing costs. It seems that CFL manufacturers could have much to gain from this legislation.

So am I against CFLs, or progress in energy efficiency? Not at all. I am, however, against the federal government taking sides in an economic decision that is best left to the consumer. Not everyone can afford the up-front costs of replacing incandescents with CFLs, and not everyone is going to understand the need to manage the 4mg of mercury in a CFL in an environmentally responsible way. Are people now going to need to test mercury levels before buying a home, in the event bulb breakage was a frequent occurrence? Or should we empower the FBI (in this case, the Federal Bureau of Illumination) to take charge of replacing and recycling the nation’s CFL bulbs under penalty of law?

I also don’t think CFLs are the end of line — they are a just rest stop before light emitting diodes (LEDs) will completely revolutionize lighting for homes and businesses. LEDs have none of the environmental hazards of CFLs, can potentially be tuned to even more desirable light wavelengths, can last essentially forever, and will be even more efficient/generate less heat. Hopefully this little experiment in social engineering will be rendered moot by advancing semiconductor technology. Despite our legislators’ best attempts to hurt us, we are sometimes capable of defending ourselves through non-legislative means.

George Entenman’s recent comment on my post celebrating entrepreneurship called to mind a recent email debate on the differences between capitalism and corporatism. Many people today don’t recognize this critical distinction, and even worse, many people fear capitalism when they should really fear (and fight) corporatism.

From B.J.:

Is the current mess in education the result of too much federal government? Or too little? Or would we be better off with more Nativity Schools? I’d take Durham Nativity School, charter/charitable schools, and local public schools with local control and parental involvement any day.

 

Disclaimer: my mistrust for government services was earned the hard way, in years of service within VA medical centers. I think the federal government does as good a job with education as it does with health care.

Friend’s Response:

Defining the argument as either/or is bad logic. Better government may often mean less government, but the private sector is full of horrors, like the pharmaceutical industry’s lies and manipulations and the health insurance industry’s corrosive attack on prevention and heartless cost reduction/profit driven policies. I fear less government intrusion than corporate takeover of our lives. At least when the government screws up, we can start a revolution with armed insurrection. If the private sector screws up, they hire Blackwater, move their assets overseas and hire lawyers to create endless litigation to shield themselves.

B.J.’s Response:

I’d rather avoid spending my money with an errant corporation than take up guns against a government. And if we had a free market, not giving a corporation my money would make it bankrupt, and powerless.

Consider this: The only reason that crooked corporations are able to run roughshod over us is because they have nearly unrestricted access to government money! The pharmaceutical industry would be a shadow of its drug-pushing self without Medicare Part D. Blackwater wouldn’t be a threat if it wasn’t funded by our government.

Normally I’m a pretty soft-spoken guy, but I do not believe it’s possible to distinguish between government and corporations in the current environment. You can’t draw a line between them because our government (especially federal, since it can print its own money) has so completely sold out to corporate interests.

Friend’s Response:

True. Constitution gives us rights against the government, little against corporations.

B.J.’s Response:

Our fundamental “right” that controls corporations is (or should be) freedom to not give them money (or today, freedom from government coercion to give them money).

Friend’s Response:

The problem with subverting government is that businesses have a bottom line and that is to make money. Very few have a moral or ethical base to do for others, or help the poor, environment or under represented. Non-profits may do a lot to help, but everyone I know is desperate for revenue and that is a hell of a way to run a country.

Government has provided services and support, and plays an extremely important role in social cohesion, communication infrastructure, etc.

Undermining the role of government, is making folks jaded and keeping us from focusing on the need to reform government.

I am no fan of bigger government, just better government and that is up to us, we the people.

Private industry also produces and has produced massive problems, death and destruction.

Balance is needed.

B.J.’s Reponse:

I’m in violent agreement that we need better government, and that better government is up to us — we need to take our country back! From our current position, a “better” government must be smaller, because right now there is no difference between government and corporate bureaucracies. Government (especially federal) exists largely to siphon money out of the economy (along with creating an additional $1-3 billion per day in new debt) and giving it to special and corporate interests. I fear those government dollars the most, because they are given to corporations who can act immorally, unethically, and destructively without fear of being punished by those who should hold businesses accountable (i.e., consumers).

Like [another friend] wrote below, 80% of responsible small biz (sounds like a good number to me) *are* good at what they do. Why? Because if you’re a small biz, your very survival depends on it. If you do bad things, customers stop giving you money, and you die. Big corporations don’t need to satisfy customers, though, they just need to hire a lobbyist and get on the government gravy train of unaccountability.

I would assert that companies running based upon a bottom-line need to make money are not the problem. The problem is that many companies are taking advantage of a corrupt government that allows them to take money, instead of needing to create the desire in the customer to give it to them.

Taking money from “customers” is theft. I feel like Time Warner robs me every month, but because telecommunications is so highly regulated, competitive offerings are limited and I don’t have much of a choice. Instead of paying over $100 per month for hundreds of brain-dead channels to gain access to seven, I would love to pay just for broadband Internet access, and the seven channels we occasionally watch.

But I literally enjoy giving money to Southwest Airlines when I travel, because they generally provide excellent customer service and respect their customers enough to have rational fares with no change fees.

If you are in an open, competitive market, you generally cannot survive unless you convince your customers to enjoy giving you money. That’s a good thing.

If you are in a highly regulated or monopolistically-managed market, you can rape, pillage, abuse, and destroy with reckless abandon. How many times have we (taxpayers) bailed out crappy airlines over the past decades? These same airlines then take our taxpayer money, go through bankruptcy, abandon their employee pension plans, and treat their employees poorly. Inevitably, this poor treatment then flows downhill to the customers. Read this stunning article.

But Southwest has been consistently profitable for over 30 years, and didn’t need any of the bailout funds that we were throwing towards the airline industry after 9/11. Go figure.

Another possible conclusion is that it’s not possible to become a successful big company without a moral or ethical base to do well for your customers. Like I said, we’re in violent agreement :-).

Friend’s Response:

I’m not the one who is negative. You guys are cynical about government, and unrealistic about the private sector. I’ve been ripped off by little guys too. We need to get beyond the corporate versus government, small versus big. It is human nature and the foibles of mankind (mostly men) that we have to worry about, small or big, big is made up of small, individuals. You can’t pin the problem necessarily to the institution.

Individuals need to take responsibility and fight the culture or system that looks the other way, fears roughing feathers, puts their own security and success at the expense of others. That’s the problem. Game theory, 101.

B.J.’s Reponse:

I’d wager we’ve all been ripped off by “little guys”. But usually only once, and that’s why little guys who rip off their customers stay little!

It’s not about government *versus* corporations - that statement is a false dichotomy. Just check out opensecrets.org or read a few appropriations bills, and government quickly becomes indistinguishable from corporate interests.

So what is capitalism, anyway? My favorite recent example is a lady we met at a party in Carrboro recently who weaves baskets. She gathers a variety of vines during the winter, seasons them, and makes intricate baskets for decorative and functional purposes.

That’s capitalism. Take a raw material, apply effort and human ingenuity, and sell the resulting product in a voluntary exchange at a higher price to earn a profit. Even the basket weaver in Carrboro needs to earn a living. But if no one buys her baskets, she’s not in a position to lobby for a government basket-weaving contract. When the government distorts the market by taking your money (or creating new money) to subsidize a business, that’s corporatism.

We should embrace capitalism, and reject corporatism.

My experience as an entrepreneur gave me a passion for economic freedom. Our country and prosperity are threatened by a federal government and tax system that favor corporate and special interests over creativity, entrepreneurship, and family businesses. In terms of taxation, administrative requirements, and regulatory burdens, it has never been so difficult to start and grow a business.

I’m not a politician, and have taken a different path to running for office. I graduated from engineering and then medical school at Duke University, and started surgery residency in 2000. While in surgery training, however, I saw an opportunity to solve a problem that made it difficult to care for my patients — I was spending way too much time hunting and gathering my patients’ information in various charts and disconnected electronic systems. So some colleagues and I started a software company in 2001 to address this problem, and deliver this critical information to the physician on a cell phone or BlackBerry.

Growing this medical software company over the next five years was an amazing education. It was always a struggle, but always rewarding. The best lessons from starting a business are learning what it means to create real value for customers, and how necessary it is to know and care about your customer to succeed in the marketplace. How long has it been since you walked into a business and were greeted by someone who was truly glad to see you? I’ll bet if you’ve had that experience, the person helping you was an owner, and not just an employee.

Don’t get me wrong, there’s nothing wrong with having a job, and being an employee. We need lots of employees. But we also need a lot more owners. That doesn’t just mean sole owners, or majority owners, but we need more businesses staffed by folks who truly have a stake in the game, and who understand that their actions directly impact the survival and growth of their company, and the happiness of its customers.

Eventually, a large multinational corporation acquired our young and growing software company. There are great people in this organization, but after a few months in the new environment, I began to realize that something was different. The intensity was still there, but it was largely directed inward — how do we prepare the budget? How do we get the funding? How do we get this position approved? Who can even approve it? You see, systems within large corporate environments are so vast and complicated that maintaining a focus on the customer and market is extremely difficult. Inevitably, service and customer satisfaction suffer as a result.

So if a company treats its customers poorly, how does it stay in business? One way is to hire a lobbyist to get money from government, instead of just from customers. That’s the worst form of welfare: corporate welfare. Another way is to use complicated tax and regulatory codes to shelter income and prevent competition, thus harvesting false economies of scale. Finally, the customer needs to have a choice to go somewhere else! But in an environment where corporate welfare, punitive taxation, and overwhelming regulation favor large incumbent corporations, who is going to start a new business to compete with these behemoths?

The answer is that you, and everyone, should have that opportunity. Furthermore, you shouldn’t have to wade through reams of forms and deal with a punitive federal tax and regulatory apparatus that makes any mistake an excuse to put you out of business. Assuming you honor your commitments and don’t hurt anyone else or their property, only your customers should have the power to put you out of business. And when you treat your customers well, something amazing will happen — they’ll actually help you grow your business!

Businesses that grow by satisfying their customers should be the engine of our economy. Right now, however, our GDP is 70% consumer spending. It’s time to change our direction with leadership that understands the difference between getting jobs, and creating jobs.

A few months ago we discussed the “bubble script” that inevitably follows the painful economic blowups associated with fractional reserve banking and our fiat monetary system. To review, the steps are as follows:

1. Ignore the real problem, and find a suitable scapegoat;
2. Attempt to bail out those affected (at least symbolically), always at taxpayer expense;
3. Prosecute a few high-profile criminal cases to wave the flag of “justice”; and
4. Respond with new regulations and bureaucratic oversight the completely ignores the underlying problem, raises costs, and further distorts the market

As we’ve seen, these steps have been playing out nicely. We identified scapegoats in scurrilous, predatory lenders and bond rating organizations. I’m sure the prosecutions are waiting in the wings, and the bailout train is already barreling down the tracks.

Yesterday the New York Times reported on the new regulations that will “protect” us from these problems in the future. To quote briefly:

The Federal Reserve moved Tuesday to impose new restrictions intended to curb unfair and deceptive home-lending practices and prevent a recurrence of this year’s meltdown in subprime mortgages.

By a 5-to-0 vote, the Fed approved a plan that would tighten provisions meant to protect borrowers and apply them to a far larger share of home loans — whether from banks, mortgage companies or other lenders — than under current regulations.

In general, the rules are meant to deter unscrupulous lenders from persuading people that they can afford loans that ought to be out of their reach. By extension, the rules are also intended to keep would-be buyers from deceiving themselves about the debt burdens they can shoulder.

The plan includes provisions that would require more extensive disclosures, restrict advertising and make it harder to lend to borrowers with little or no documentation and a questionable ability to repay. It would also allow borrowers, in some circumstances, to sue lenders who violate the rules.

How much are all these “extensive disclosures” going to cost me, the customer? You don’t expect the mortgage industry to lose money on these costs, do you? These costs will be wrapped into their cost of doing business, and passed right along to you. Why do I need anyone’s permission to sue a lender? How is the federal government, or Federal Reserve, going to get into the underwriting business and evaluate my ability to repay? How is the federal government, or Federal Reserve, going to create rules to prevent me from “deceiving myself”? If I’m deceiving myself, it seems like I am the problem.

Look, I’m not saying that there’s an easy answer here. There’s not. Predatory lenders will always be with us, and you can’t regulate greed out of existence. But we can educate, and look out for our neighbors. The cure for this madness is twofold: stop making “easy money” even easier with an inflationary fiat currency and banking system, and let’s start talking with each other, and watching each others’ backs. It’s a rough world out there — the solution is education and helping our neighbors, not regulation.

Do you know someone who needs help? Want to know where to get started? Meet Dave Ramsey.

Oh, and when will people realize that fixing a problem first requires correctly identifying the problem?

This morning I had the pleasure of visiting a retired Duke general surgeon, Dr. Joseph Moylan. Dr. Moylan was a highly respected attending when I was in residency at Duke, and I hadn’t seen him for years when we recognized each other at a local coffee shop last month. After reintroducing ourselves, Dr. Moylan shared his new “job” since retirement: founder and president of Durham Nativity School.

I’ve had a long fascination with education. My wife taught fourth grade in Durham while I was in medical training, and four of her five years were at E.K. Powe Elementary on Ninth Street. Powe had a diverse student population with lots of social challenges, and every year we agonized over the difficulty of reaching children whose home situations included hunger, homelessness, physical and substance abuse, absent parents, and a general apathy towards education and basic social skills.

The limitations in public education are such that my wife’s optimism as a first-time teacher gradually gave way to pragmatic realism, and at some point we realized that her eight hours per day the classroom (plus the typical assortment of before- and after-school care) was not enough to raise a child successfully in the absence of engaged and concerned parent(s). While some still believe we can “outsource” social problems to governmental institutions, the harsh reality is that government has never proven to be an effective parent.

The model at Durham Nativity School is different, and worth celebrating. From the moment Dr. Moylan walked me around the halls, things immediately stood out. All the boys were neatly attired in shirts and ties, with real knots. I wasn’t tying a tie in the sixth grade, so these young men were already ahead of me. He introduced me to two of the students, and each reached out his hand, looked me straight in the eye, gave me a firm handshake, and said, “Welcome to Durham Nativity School. My name is …”.

At that point, I was floored. My wife and I have noticed how rare it is for children and young adults to look us in the eye nowadays, and the message of insecurity and duplicity communicated by those who refuse to make eye contact is a sad commentary on self-image and self-confidence.

Then I watched them change classes. The bell rang, and instead of a mad scramble between classrooms and lockers, there was an orderly movement of young men culminating in each class lining up outside its respective door for the next class. The teacher then appeared at the door, also dressed in business attire, and each student received a handshake and a greeting while entering the classroom. Dr. Moylan then shared with me that the Headmaster greets each child at the main door upon arriving in the morning with — you guessed it — a handshake, welcome, and shared commitment to do one’s best during the course of the day.

We then sat down in Dr. Moylan’s office so I could ask some tough questions about how this place really worked. The office wasn’t much — no Herman Miller Aeron chairs, just furniture that reminded me of my startup days when we furnished our office with used dorm furniture from the Duke surplus store. Clearly, chairs and desks for the President are less important than the educational mission. That’s a good sign.

Dr. Moylan shared some lessons learned, and perspectives on the curriculum, that reflect seven years of iterative improvement on an established model. There are over 40 Nativity Schools in the country, and all of them focus on identifying and serving children who would otherwise fall through the cracks of the public educational system. Admission criteria include academic potential (even if the student is currently “underperforming”), as well as financial hardship. Graduating fifth-grade applicants are then taken through a orientation/screening program starting in February and lasting through the summer, when the new sixth-grade class is identified.

After seven years, their record is remarkable. They take incoming sixth graders functioning at a 4-5 grade level, and graduate eighth graders functioning at a 9.5-10.5 grade level. Their graduates earn scholarships at private high schools such as Cary Academy, Durham Academy, Ravenscroft, or even boarding schools like the Asheville School. While transitioning from an underprivileged background into competitive and often wealthy private schools has its own challenges, the challenges of upward mobility for both students and parents were deemed preferable to the social challenges of public high school.

While they initially experienced more attrition than other Nativity Schools, with classes of 15 dropping to 10 at graduation, they objectively studied their performance and identified the home situation as the root cause of most attrition. As a result, their program now includes a dedicated social worker who works not in the school, but in the homes with the parents. They’ve also discovered the value of engaging the parents directly in the school through volunteer activities and mentoring opportunities.

The final critical variable is their curriculum. It’s an extended day program, from 8am to 6pm with a heavy focus on language arts, mathematics, and faith-based, character building activities. Students spend one-half day per week performing community service, and learn that no matter how challenging their situation, there are those who are even less fortunate. Mentors and volunteers from the community also play a critical role, and on average 40 volunteers give one hour to the school every week.

Not only are the days long, but the curriculum is year-round, as well. Camp experiences and field trips during the summer take the students out of often hazardous neighborhoods during peak times of gang activity. A recent trip took them to Washington D.C., where they had the chance to meet Colin Powell:

So how much does all this goodness cost Durham and North Carolina taxpayers? Nothing. How about American taxpayers? Nothing. Durham Nativity School receives no federal or state funding. The students receive a $66,000 education over three years, and a chance at a radically different future, thanks to the devotion and generosity of highly-motivated staff and private donors. To whom much is given, much is expected, and the motto for Durham Nativity School says it all: “Educating tomorrow’s community leaders.”

Durham Nativity School accepts 15 students per year. Last year, they only had 38 applicants for these 15 positions. If you know of an at-risk young man who would benefit from this unique opportunity, he has nothing to lose, and everything to gain, from applying. The application process for next year has already started, so interested students, parents, and guardians should contact the school as soon as possible.

Finally, if you’re looking to make a charitable or time contribution that will be highly leveraged for maximum impact, I strongly recommend Durham Nativity School. Isn’t it great that the government does not have a complete monopoly on education?

Our founders knew the greatest enemies of our Constitutional republic are ignorance and apathy. As more Americans are questioning the trajectory of our nation heading into the next election cycle, it’s never been more critical to move beyond 30-second sound bites and into frank discussions of our challenges and opportunities.

Nowhere is this need more apparent than within the discipline of science. A movement is afoot to organize a presidential debate centered around science and technology, and as a medical doctor, engineer, and software entrepreneur, I couldn’t agree more with the importance of this debate.

The importance of a presidential Science Debate is not to play Trivial Pursuit or slog through dogmatic quagmires of creationism versus evolution, but rather to gain some insight into how our leaders view problem solving in general, and how they view the intersection among science, research, ethics, public policy, and public financing.

As an engineer and physician, I spent years studying and optimizing systems. From electric circuits to human physiology and even monetary policy, our world is filled with examples of open systems, closed systems, feedback loops, dependent and independent variables, and other scientific principles with extremely broad applications.

What would happen if we had leaders in government capable thinking in terms of cause and effect, as opposed to legislative and judicial precedent? What if our leaders were willing to address the cognitive dissonance when reported “data” don’t agree with their observations of reality? Is honest scientific inquiry in politics even possible, when science itself can become so highly politicized?

A Science Debate could address these questions, and potentially reveal which candidates are mere talking heads for well-researched soundbites, and which ones are capable of analytical thought and deductive reasoning.

Visit Sciencedebate2008.com and join the Facebook group Call for a Science Debate to show your support.