Number of People in Extreme Poverty Drops to Record Low

Malthus must be turning over in his grave after the World Bank announced this week that the percentage of the world’s 7.3-billion-plus people living in extreme poverty is likely to fall to a record low this year of under 10 percent.

Using an updated international poverty line of US $1.90 a day, the Bank projects that “global poverty will have fallen from 902 million people or 12.8 per cent of the global population in 2012 to 702 million people, or 9.6 per cent of the global population, this year.”

The Bank’s president attributes this good news to “strong growth rates in developing countries in recent years, investments in people’s education, health, and social safety nets that helped keep people from falling back into poverty. He cautioned, however, that with slowing global economic growth, and with many of the world’s remaining poor people living in fragile and conflict-affected states, and the considerable depth and breadth of remaining poverty, the goal to end extreme poverty remained a highly ambitious target.”

An ambitious target, for sure. But it is refreshing to learn that strong growth rates are recognized as an important part of the formula to end poverty. As Cato Institute’s blog notes,

“The key to the improvements in the lives of ordinary people over the last 200 years were industrialization and trade, which generated historically unprecedented rates of growth. And the importance of growth cannot be overemphasized. There is not a single example of a country emerging from widespread poverty without sustained economic growth.”

Most Americans never experience the kind of extreme poverty other parts of the world are trying to climb out of. But it would be nice if more of us, including our elected officials in Washington, D.C. and Salem, understood that economic growth, generated by a system of free markets and property rights in a capitalist economy, is a necessary condition to improve living standards.

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“Our System Is Set up to Fail”

“Our system is set up to fail.” That’s not me talking, it’s then-Governor John Kitzhaber in a 2002 entry to his private journal, released as part of a public records request for his email correspondence. The full paragraph reads:

“Our system is set up to fail. We have a centralized government which does not give much authority and responsibility to individuals in the community. Then you have a community that has come to government to solve their own problems. It has become a self fulfilling prophecy. The community is not going to step up to the plate and assume responsibility for work they expect and are paying government to do.”

He went on to say,

“…we have built up a centralized paternalistic form of government that assumes much of the responsibility for individuals and for the community. This works in some areas—national defense, public infrastructure, public education, law enforcement (what are the common denominators here?). Most of these things don’t require much from individuals or from the community.”

Particularly telling was his flawed assumption that public education doesn’t “require much from individuals or from the community.” He demonstrated this belief even before becoming Governor when in 1991, as President of the State Senate he signed on to the Education Act for the 21st Century with its flawed CIM and CAM tests. Cascade dubbed it Education by Committee in Oregon. As that was failing in 1999, then-Governor Kitzhaber signed onto the Quality Education Model, designed to spend more money to get the Act to work. Cascade dubbed the QEM Money for Nothing.

Finally in 2011, apparently concluding that even more centralization of education was needed, Kitzhaber created the Oregon Education Investment Board to “unify education from birth to college and career.” Cascade dubbed the OEIB Top Down on Steroids, and it mercifully died shortly after Kitzhaber resigned office early this year, to be replaced by the next centralized paternalist piece of the education puzzle, the Chief Education Office, which hasn’t had a chance to show its fatal flaws—yet.

So, Kitzhaber recognized the failure of “centralized paternalistic government,” but somehow thought it might work in public education so he continued to promote and expand it there for decades. What did Einstein say about doing the same thing over and over again and expecting different results?

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The Everyday Heroes of 9/11, Remembered

“The greatest thing I ever did with my life.”

The largest sea evacuation in history took place on September 11, 2001, when nearly 500,000 civilians were rescued from Manhattan by boat in less than nine hours. By comparison, during World War II, the evacuation after the Battle of Dunkirk saved 339,000 British and French soldiers over the course of nine days.

Many of the rescue boats were private watercraft whose owners volunteered to ferry thousands to safety.

“No training, just people doing what they had to do that day,” said a man who worked on one of the boats.

“Average people, they stepped up when they needed to,” said another.

This video narrated by Tom Hanks tells their unforgettable, moving story.

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Freedom in Fiction: A Man for All Seasons

“So now you’d give the Devil benefit of law!” declares Thomas More’s son-in-law in Robert Bolt’s classic play, A Man for All Seasons.

“Yes,” More replies. “What would you do? Cut a great road through the law to get after the Devil?”

“I’d cut down every law in England to do that!”

“Oh? And when the last law was down, and the Devil turned round on you―where would you hide, Roper, the laws all being flat? This country’s planted thick with laws from coast to coast―man’s laws, not God’s―and if you cut them down―and you’re just the man to do it―d’you think you could stand upright in the winds that would blow then? Yes, I’d give the Devil benefit of law, for my own safety’s sake.”

Sir Thomas More is remembered as a great statesman, humanist, and hero of conscience. Bolt’s play shows him to be all three, but particularly focuses on More’s defense of the rule of law against its disintegration and a culture of “political correctness.”

Henry VIII’s decision to make himself head of the Church of England to divorce Catherine of Aragon is famous. Considered less today is how Henry’s actions changed the balance of power in English government and civic life. Having dispensed with his opponents, the king became nearly an absolute monarch, formally limited by the English Constitution and Parliament, but only to the extent that the people’s representatives were willing and able to oppose his wishes. The fewer the checks on the power of the king, the harder it became for any individual to hold a different position from that favored by the monarch.

And all the shiftier became the political sands.

At the core of the drama is the dangerous rise of Early Modern autocratic government and how individuals react to it. More neither desires nor seeks a public conflict with Henry, who is also his personal friend. As Lord Chancellor, he tries scrupulously to follow the law and refuses to take positions he believes are not justifiable according to legal precedent or logic. He will not swear a false oath. In that he differs from most other officeholders, some of whom adopt the king’s domestic and diplomatic agendas for substantial material gain. Others concur publicly with the king because they would rather not rock the boat. As More’s friend the Duke of Norfolk says:

“You’re behaving like a fool. You’re behaving like a crank. You’re not behaving like a gentleman….We’re [the nobility] supposed to be the arrogant ones, the proud, splenetic ones―and we’ve all given in! Why must you stand out?”

More’s response shows how sincerely he values integrity, the expression of one’s personhood, over political expedience:

“I will not give in because I oppose it―I do―not my pride, not my spleen, nor any other of my appetites but I do―I! Is there no single sinew in the midst of this [grabbing his shoulder] that serves no appetite of Norfolk’s but is just Norfolk? There is! Give that some exercise, my lord!”

A nation’s rule of law depends on certain basic things, such as equal justice, clearly defined statutes, enforcement of contracts, respect for property rights, and the sanctity of the oath. Dispensing with these tips the scales toward factionalism and autocracy, against the rights of individuals and citizens. A Man for All Seasons reminds us how delicate is the fabric of freedom.

(Paul Scofield won Best Actor for his role as Thomas More in the 1966 film version of A Man for All Seasons, which won six Oscars, including Best Picture. Scofield also won the 1962 Tony Award for Best Actor for the original Broadway production. Charleton Heston both directed and starred in a 1988 television movie, also based on Bolt’s play.)

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Freedom in Film: Shane (1953)

“That’s the trouble with this country. There ain’t a marshal within a hundred-mile ride.”

Considered by many the greatest Western of all time, Shane opened on this day in 1953. Based on the novel by Jack Schaefer, Shane is about the end of the era of cattle drivers, the open range, and gunfighters settling disputes. The lawless days are giving way to civilization, but only through the courage of homesteading families determined to turn the Wild West into a peaceful, self-sufficient, hard-working community. Visually stunning, Shane was filmed in color on location near Jackson Hole, Wyoming.

Alan Ladd plays Shane, a man with a past who works as a farm hand for Joe Starrett (Van Heflin) and his wife Marian (Jean Arthur). Starrett is the unofficial leader of seven homesteading families, who want to put down roots and create something bigger than themselves―a future built from hard work and devotion to each other. They want to build a town, with “a church and a school,” a place where people can come and raise families.

The settlers’ vision of civilization conflicts with the desires of the cattle barons, who want to keep the range open. The barons reject the settlers’ claims to private property, stampeding through plowed fields and fences to terrorize people into giving up and leaving. When the barons resort to lawless violence, the homesteaders’ last chance of winning is Shane.

Starrett and Shane are each men of courage, self-restraint, and high ideals. They seek prudent, honorable solutions to the settlers’ problems; and in different ways they need to work together to survive. Shane celebrates individual initiative, creativity, free enterprise, and the classic opportunity of the American West.

But it is also clear that no one succeeds alone. Joe and Marian Starrett are a team. Their farm is only possible because they have each other, as Joe points out with loving pride. Their family also needs neighbors. The farmers rely on each other for moral and physical support and protection. The rights of individuals are only secure as long as honest people defend them. And the whole community needs the act of selfless courage that only Shane can pull off.

The Starretts’ young son Joey idolizes Shane, but Shane steers him away from the false glamour of the lone ranger. When Shane rides off into the sunset, he tells Joey, “You go home to your mother and father and grow up to be strong and straight.” As Shane exits, the day of the gunfighter is over. The family now guards the range.

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Milton Friedman Legacy Day 2015

Today we join with others around the world to celebrate Friedman Legacy Day. Nobel prize winning economist Milton Friedman would have been 103 years old today. I first met Milton and his wife Rose in Ashland in 1989. They became the first noted supporters of the school choice initiative that I helped place on Oregon’s 1990 general election ballot. It was the failure of that measure at the polls that led us to form Cascade Policy Institute in January 1991 to carry on the work of educating Oregonians about liberty, including the liberty to choose your child’s school. Years later Milton and Rose formed what is now The Friedman Foundation for Educational Choice.

I was honored when The Oregonian asked me to pen the following op-ed which was published the day after Milton Friedman passed away in 2006. His views, insights and compelling way of promoting Capitalism and Freedom live on to the benefit of everyone interested in building a better, freer world.

Full text

A great champion of human liberty passed away on Thursday at the age of 94.  Milton Friedman won the Nobel Prize in economics in 1976, but he likely will be remembered more for his passionate devotion to individual freedom.

Friedman’s connection to Oregon was through his devoted wife Rose, a member of the Director family. He was born in New York City in 1912, the son of poor Eastern European immigrants. She emigrated with her family from Eastern Europe to Portland in 1913. She attended public schools and Reed College before transferring to University of Chicago. Rose and Milton met as graduate students at Chicago and the rest, as they say, is history.

They raised two children together and co-wrote three books on economics and public policy: “Capitalism and Freedom,” “Free to Choose” and “Tyranny of the Status Quo.” Rose also helped produce the 10-part PBS television series, “Free to Choose,” which introduced the power of free-market economic ideas to the general public here and around the world beginning in 1980. They published their memoirs, “Milton and Rose D. Friedman, Two Lucky People” in 1998.

Milton started his career as a young economist in the 1930s working for the New Deal Roosevelt administration in Washington, D.C. He worked in the U.S. Treasury Department during World War II before leaving government for teaching. He later said: “My experience in those years shaped the advice I regularly gave my graduate students in later years: by all means spend a few years in Washington — but only a few.”

Friedman issued that warning because he came to realize that government controls over prices, wages and production were both inefficient and violations of liberty. He described himself as “thoroughly Keynesian” back then but later said, “You know, it’s a mystery as to why people think Roosevelt’s policies pulled us out of the Depression. The problem was that you had unemployed machines and unemployed people. How do you get them together by forming industrial cartels and keeping prices and wages up?

More than perhaps any other modern economist, Friedman’s ideas were credited by Western leaders such Ronald Reagan and Margaret Thatcher, and free-market revolutionaries in formerly communist countries, as a driving force behind their efforts.

Milton Friedman was fond of saying that he was not a conservative. He did not want to conserve much of what our current political culture has to offer. He called himself both radical and libertarian. He was an early and strong advocate for abolishing the military draft, and he saw more harm than good in government’s attempts to outlaw peaceful human behavior such as drug use and prostitution.

Of all the ideas he advocated, none was more important to him than universal school choice, a concept he first wrote about in 1955. He and Rose founded the Milton and Rose D. Friedman Foundation to advocate for both public and private school choice.

I first met Milton and Rose when they attended the Ashland Shakespeare Festival in 1989. Just this past Monday I thought about what Milton would have said in response to a front page Oregonian story about how many citizen initiatives aimed at limiting the power of government had not passed in the recent election. The headline read, “Voters nip libertarian dreams across U.S.” If Milton had seen that, I think he would have responded, “It was the tactics that didn’t succeed in this election. The dreams, which are really American Dreams, live on.”

Milton Friedman, lover of liberty, is gone.  But his dreams, the dreams of countless people here and around the world, live on.

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Could We Really Be Driving on Platinum Streets?

While politicians may be forgiven for stretching facts when it comes to making their points, they shouldn’t totally ignore economic reality.

That’s what seemed to happen on July 6, the last day of the Oregon 2015 legislative session, when a huge $1 billion dollar-plus bonding measure was up for debate.

Because such bills usually have something to offer in every legislator’s district, most can be expected to vote for such a bill, as they did in this case.

But Representative Greg Smith (R) went over the top in his statements on the House floor in support of the bill. He began by saying, “The value of infrastructure development, I guess, is in the eye of the beholder. I’m of the opinion that public sector investment leads to private sector investment.”

Of course, this is far from certain, especially when public sector investments are often prone to overspending and underperforming, or so ill-advised that they may actually hamper private sector investment rather than enhance it. We might give Representative Smith the benefit of the doubt here.

But, then he said this: “…and but for Measure 5, we would be driving on platinum streets. That is fact!”

With all due respect, that is not a fact! Far from it. Measure 5 was a citizen’s initiative passed by Oregon voters in 1990 aimed at limiting the amount of property tax that could be extracted from homeowners and businesses.

One early analysis showed that from 1991 to 2000, property owners saved an impressive $5.05 billion thanks to Measure 5. A later analysis found that over its first 16 years, Measure 5 reduced local revenue by some $41 billion. Impressive, but not nearly enough to afford platinum streets anywhere in the state.

You see, while asphalt costs in the range of $50 to $150 per ton, platinum costs closer to $970 per ounce, which translates to about $31 million per ton. Even assuming you wouldn’t need as much platinum because it’s so much harder than asphalt, it’s difficult to imagine that paving our streets with precious metals would ever be either affordable or sensible on any level.

Representative Smith was trying to make a point that had it not been for Measure 5, Oregonians would have more money to make better public investments. But by taking his argument so over the top, he simply brought into question whether at least some of our elected officials understand that resources are limited but human wants and desires are not. Economics is the science of how to best allocate those scarce resources. Politics is a poor substitute.

Posted in Cascade Website, Steve Buckstein, Tax and Budget, Transportation | Tagged , , | 2 Comments

Oregon Right to Try Bill Passes Both Houses

Oregon’s Right to Try bill (HB 2300 B), passed 29-0 in the Senate last night, was re-passed with some restrictive amendments in the House by 60-0 this afternoon. It now goes to Governor Kate Brown’s desk for her signature. It will give many terminally ill Oregonians the Right to Try experimental drugs and devices not yet approved by the FDA.

Special thanks go to Representatives Mitch Greenlick and Knute Buehler, and Senator Laurie Monnes Anderson who all starting working on this before the session even began in January, and kept at it until the final bill passed both houses without one No vote.

The final bill is more restrictive than similar statutes in 21 other states (with its 18-year-old minimum age limit and its six-months to expected death definition of terminal illness), but it’s a good start and hopefully can be expanded in the future to cover children and people who have terminal illnesses such as ALS where patients may live for a number of years.

Cascade played a significant role in the passage of this bill, as did our sister organization, the Goldwater Institute of Arizona, which pioneered the Right to Try concept around the country. Personal liberty had a good day in Oregon today.

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Cascade Board Member Gilion Dumas Coaches PSU Debaters

Cascade Policy Institute Board member Gilion Dumas recently spent 90 minutes with six young women at Portland State University who were preparing for a debate with their peers about the issue of mandatory sick leave. The women were part of the 2015 class at the PSU NEW Leadership Program, an annual, six-day residential leadership training program for enrolled college women.

The six students were assigned to argue against mandatory sick leave – but since most of them had limited experience in business, it was challenging to fully understand the effects of a government mandate. Gilion, owner of a law firm – Dumas Law Group – helped them appreciate that both employers and employees prefer to have choices rather than mandates. Everyone has different needs; some employees would prefer higher salaries with fewer benefits, while others might prefer the opposite. In the absence of government regulation, managers and employees are free to negotiate the solutions that work best for them.

Gilion enjoyed it and learned a lot from these young women. This was at least the fourth time that speakers from Cascade have been invited to present at the NEW Leadership Program. We appreciate being part of the guest faculty, and look forward to working with NEW Leadership in the future.

Gilion at PSU

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Coming to America: Hang onto a Dream

America is the only country in the world founded on ideas—not on race, not on culture, not on language, but on the ideas of human liberty and freedom. These ideas, as our founders noted, are universal, but they have been lived out here better than anywhere else on earth. That’s why so many people from around the world have come to America—to experience the liberty and freedom denied them at home.

As we celebrate the founding of our nation on July 4th, I suggest watching the opening two minutes and 25 seconds of Neil Diamond’s movie The Jazz Singer, featuring a short version of his iconic song, “Coming to America.”

You can also watch him sing the complete version of “Coming to America” in concert in the final scenes of the movie here:

Happy Independence Day.

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