Georgia’s Hopeless Scholarship Program

January 25, 2012

I thought I would dive from Hamburger @ The Fed right into a can of worms, call them maggots from the stale burger or whatever but this will be fun!!! (Maybe even tasty!)  For those that aren’t familiar with it the Hope Scholarship Program is a government scholarship program setup by past GA Governor Zel Miller and the General Assembly.  The purpose of the program is supposedly aimed at providing financial assistance for college to children from low-to-moderate income families.

I am not going to really tread into the argument today of why Lotteries are probably the most unethical and plain out stupid thing a government can do to generate revenue, instead I want to simply address the logic or actually lack there of behind the “Hopeless” scholarship program.

The Carl Vinson Institute at the University of Georgia in this survey, discovered lottery play was inversely related to education level. In fact below are two quotes taken directly from the analysis of the survey results and after reviewing their results the data fits the declarations.

“An individual without a high school degree or GED is more than
four times as likely to be an active lottery player as an individual
who has an education above the high school level.”

“A high school graduate is two and a half times more likely than
someone who has an education above the high school level to be
an active lottery player.”

There have been numerous studies into the regressive nature of a lottery and the linked study above contains several scholarly references to those studies but the general theme you will discover if you spend your time pummeling through some of them is this; there is an inverse relationship between  education level and lottery ticket purchases.  This is a trend that seems to be pretty consistent throughout different states even countries where lotteries are ran by the government.  For example in GA and SC their appears to be the relationship that about each year between 65% – 70% of the lotto is funded by people without college degrees.

In GA about 25% of those proceeds are used to fund the HOPEless scholarship program, the remaining is used for a “government indoctrination” kindergarten program, purchase supplies for “government indoctrination centers” and to administer the lottery.

SO here is where the Logic of the HOPEless scholarship breaks down.  If the real goal is to provide scholarships and access to college educations for low-middle income families, and the money comes from predominately individuals without college educations via lottery ticket purchases, then wouldn’t it seem illogical that the purpose of this government program is to remove the existence of it’s primary base of funding???

I mean think about this. HOPE Money comes from Lotto ticket sales.   Most of those sales are to folks without college degrees.  The money is used to send the kids of those folks to college.  Once the kids graduate college they aren’t near as likely to purchase a lotto ticket.  Hope goes broke.  Maybe this is a bit of an oversimplification, but the principle still remains, thus HOPE is a completely illogical government program.

Wouldn’t it be much better if at the “government indoctrination centers” that the people were attending they actually taught them that the lottery is “a tax on people who are bad at math”.  That those people should plan to fund the education of their child. To do this, instead of purchasing $10 a week on lotto tickets they should take that $40 each month, stick it into a diversification of mutual funds and that in 18 years they would end up with over $26000 dollars to help fund their child’s education.

I realize that 26K may not fully fund a college education depending on the school you choose but, it sure would be nice to have that in savings to offer your child some options instead of just telling them, “Sorry junior, I spent your college fund at the corner store, but that’s ok, the govt gonna take care of ya with that HOPEless scholarship program!!!”

Wolfravenous

Hamburger Massacre @ The Fed!!!

January 24, 2012

I must disclose up front I am a fan of hamburger meat.  I enjoy hamburger in everything from stroganoff to spaghetti, to taco salad and of course the classic bacon cheese burger.  I am a fan of hamburger meat plain and simple.

Recently I entered into a discussion with my aging mother about how expensive hamburger meat is at her local grocery store.  I attempted to explain to mom that the main reason the hamburger at the grocer in town was constantly going up in price was not a result of a massive shortage of cattle in the world or a surge in demand because all the vegans have torn away from their veggie loving faith and now want cow, but instead that the value of her dollars was decreasing.   It is that decrease in the value of her dollar that requires the butcher to demand more of them for the same pound of burger.

I tried to use hypothetical examples with her about pounds of ground beef vs. dollars in different decades, but all my data was made up data but I knew the principle was correct.  I decided I would go back and actually reference some of the data for real that I hypothesized to explain a concept to my mother.

I found two wonderful websites that provided me the data I needed to go back and evaluate the hypothetical discussion I had with mom with the real data.  The first site was The People History: Comparison of Prices Over 70 Years which allowed me to reference the price of ground cow going all the way back to 1930.  The other site is a treasure trove of data and can be used to pull up all kinds of interesting facts of finance history, it is MeasuringWorth.com and I used this site for determining both the data for the New York Market gold index and the production workers average hourly compensation.  Below is a layout of the data, but before you get all lost in words like gold index or production workers average hourly compensation, let me calm your fears it just means the price of gold and how much the “average joe / joanne” made per hour.  Below is the data:

Year / Price per lb of Burger / Price per Ounce of Gold / Production Worker Avg Hourly Wage

1930 /     12 cents                    /          $ 20.67                      /    $  0.53
1940 /     20 cents                   /          $ 35.00                      /    $  0.67
1950 /     30 cents                   /          $ 35.00                      /    $  1.55
1960 /    45 cents                    /          $ 35.00                      /    $  2.54
1970 /    70 cents                    /          $ 36.41                       /    $  3.93
1980 /    99 cents                    /          $ 612.56                    /    $  9.12
1990 /    89 cents                    /          $ 384.93                    /   $ 14.41
2009 /   $3.99                         /          $ 975.00                    /   $ 26.15

The conversation over the holidays with my mother about hamburger meat followed the cliché form of “Well when I went to work back in the 50’s I could buy hamburger meat for only x cents per pound.”  Using the above data it’s easy enough to calculate how much hamburger she could purchase with an hour of her labor.  In 1950 the average hourly wage for a production worker is $1.55 and hamburger was 30 cents per pound so she could trade an hour of her life for a little over 5 lbs of ground cow.  1.55/0.30 = 5.167

The data above also reflects the truth that my mom would have had to work almost 23 hours to purchase 1 ounce of gold.  35.00/1.53 = 22.88  There is only one HUGE problem with this calculation… The price of gold in 1940, 50 or 60 illustrated above is not a real market value.  The constant price of 35.00 an ounce for decades is an anomaly created by the federal govt, central banks and their intervention in the gold market which began with the confiscation of all American citizens’ gold in 1933 by a tyrannical executive order.  Fortunate for the world the The Losing Battle to Fix Gold at $35 ended in 1968.

So to generate a more realistic comparison I am going to use the data for the value of gold prior to the confiscation, the 1930 value of $ 20.67 per ounce.   My dilemma with the mother discussion or with this article is my mother wasn’t alive in 1930.  Enter my vivid ability to imagine and pretend.  I will enlist the memory of my late grandpa to formulate my scenario.

Let us imagine that my grandpa worked for 53 cents an hour as the data above indicates.  At that rate and the 1930 price of burger and gold, he could have purchased almost 4 and half pounds of burger for an hours labor: 0.53 / 0.12 = 4.4    It would also require my grandpa to work for 39 hours to earn enough to purchase one ounce of gold: 20.67 / 0.53 = 39.  That is almost a full work week for one ounce of gold, funny I remember reading somewhere about someone in ancient Rome working a week for an ounce of gold, but can’t remember the reference, I digress…

Mooooving on,  let us pretend that my grandpa one week, saved his entire pay, bought a 1 ounce gold coin and buried it in a mason jar out in the backyard, near the pet graveyard where some of the best ‘coon and ‘possum dogs in the world were laid to rest.  Then in 2009, when my nephew was buryin’ “ol’ Blue”, an amazing bluetick hound that was legendary across many hollers, he struck gold.  After some deliberation he decided he should give the coin to my mother since it was in fact buried in the dirt she inherited.  My mom then took and sold the coin at the then market price of $975.00.  She then headed to the grocer where she is able to purchase an amazing 244 lbs of burger!!!  975.00/3.99 = 244.4.   This burger represents a trade for my grandpa’s week (39 hours) of labor decades ago.

We might be curious though how does this compare to his meat garnering ability back in 1930 when he earned the money to purchase the coin. Well in 1930 for 20.67 the price of the 1 ounce gold coin he could have only bought 172 lbs of ground cow.  20.67 / 0.12 = 172

This leads me to conclude the price of hamburger has actually DECREASED by a factor of about %30.  Here is the math  244.4 – 172 = 72.4 and 72.4 / 244.4 * 100% = 29.6%

What about at today’s prices?  Well the price of gold when I checked earlier today was $ 1668 dollars per ounce and I found some hamburger for $3.75 a pound, good stuff too, not the all fat hamburger, but the leaner 90/10 mix!!!

Let’s run the numbers and be AMAZED.  If I had gramp’s 1 ounce gold coin, that represented a week of his labor, I could buy 445 lbs of delicious ground cow!!! 1668 / 3.75 = 445  Oh My, can you say cook out at Wolfravenous’ house???  This is also a relative decrease in price of the patty on my next bacon cheeseburger of about 60%.  445 – 172 =  273  and 273 / 445 * 100% = 61.3%

SO WHAT HAPPENED???  Why does my mom think hamburger is more expensive than it used to be???  The Federal Reserve happened.  The EVIL Federal Reserve and it’s “rotting potato” monetary policy.  The Fed creates more and more fiat dollars.  Those new fiat dollars destroy the value of dollars already in existence that folks like my grandpa or mother traded hours of their life for.  This is a most vile form of theft because most of the people being robbed do not realize it because the Chairmen of the Fed is not standing in front of them holding them up at gunpoint.  However, this is THEFT, it is stealing the time people traded of their lives by destroying the value of the dollars they traded that time for.

As a result, even though hamburger is really, produced and delivered to market more efficiently now than in 1930, and the relative price has decreased by approximately 60% my mother thinks it has gone up.  I blame this misconception partly on the widespread incorrect definition of inflation.  Most folks, my mother included think that inflation is “higher prices”, when actually “inflation” is an increase in the supply of something, in this case the medium of exchange and even more specifically dollars.  As the Fed increases the amount of dollars in existence, they “inflate” the money supply, making my mom’s dollars worth less and her gold worth more because there are lots more dollars in circulation, but the amount of gold out there, didn’t change too much.

Unfortunately, this effect also translates over to the grocers shelves, as dollars increased drastically from 2009 to 2012 making their value fall, the prices you saw in the grocery store rose and are continuing to do so.

There are two things to take from this article.  The US dollar is rotting, it has been for decades, it is on purpose, it is made to do so by the Fed, so don’t be caught holding dollars or bananas for really long periods of time.

Second and lastly, If you enjoy hamburger meat as much as I do it might be worth burying a 1 ounce gold coin out back so your grandchildren can have a lavish cookout with a few hundred pounds of ground cow when they are old enough to write a blog about their granpa’s amazing foresight and 100% grade A “Angus” generosity.

Wolfravenous

The Middle East, What Are We Witnessing???

April 21, 2011

This blog post was actually a comment reply I made to a friend on Facebook in NC where I used to live. So as you read through understand it was written in that context. :)

I don’t think this is Armageddon, I do however think this is a direct result of the internet. Never before in history have ordinary everyday people had the ability to do the two things the internet allows.

First they are EASILY able to circumvent the “State” controlled media and find alternative sources of information and news. Many of which focus on the corruption within the “State” rulers and expose their lies & deceit. The second thing is that the internet allows the ordinary person to have influence and effect, outside of the range of a few miles.

Previously in history this conversation would not be taking place and when I moved from NC to GA, I would have no longer had any means to try to influence anything in NC save for writing letters. This is why in colonial days you see that the leaders of influence at the time wrote LOTS and LOTS of letters, Jefferson, Madison, Franklin, all spent lots of times writing letters to one another and other acquaintances. These letters got shown around among their social circles much the way we display posts on FB. Difference is that today delivery and distribution is instantaneous.

The issues we are seeing now come to fruition is a combination of a conflicts within the human spirit. Some mens desire to rule over and control other men and the desire within the human spirit for liberty. “Inclined to Liberty: The Futile Attempt to Supress the Human Spirit” does a wonderful job of describing this http://mises.org/books/inclined.pdf Another text, “Speaking of Liberty” contributes just as much value on the topic http://mises.org/books/sol.pdf

See the amazing power of enriching mans MIND. I just gave you two amazing books as well as anyone else on your friends list that bothers to read these posts. And it is quite likely that the books are actually being housed on a server in California, Alabama, or Atlanta but you can have them in a few seconds with the click of a button.

As we see those in power centers continue to struggle against one another, they now also must struggle against this desire of Mankind to be free that has been made more powerful by the internet than ever before! These are interesting times we are living through!


Economics in One Lesson Chapters 1 -3

May 13, 2010

This is the developing show notes for the BlogTalkRadio show on Friday, May 14, 2010 at 10 am EST

I will be hosting a discussion of Henry Hazlitt’s “Economics in One Lesson” Chapters 1-3

You may access the show page HERE

You may also download a PDF of the text from the Foundation for Economic Education for free by using the link in the right column of the Homepage or by clicking HERE

I would also recommend for anyone wishing for a deeper understanding that they listen to these three MP3 files.

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Economics in One Lesson

April 17, 2010

This is my first real post to my new wordpress blog. I thought I would give this site a try since it seems to be all the rave amongst my twitter friends.  So to start off, I thought I would post a link to one  of the books that I think it would be of benefit for most everyone to read.  The best part is this file is a free download in PDF format so you can download it and put it on a portable reading device.  I even have it saved in GoodReader on my iPhone.  Henry Hazlitt’s ‘Economics in One Lesson’.  Hope you enjoy this wonderful treatise on economics.  It is very understandable language even for those with no real love of Economics.


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