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Markets Judging Central Plan, Not Economy; Fed Stuck

I wonder if analysts of the future will look to our era and find one of the most telling dynamics to be that the investment markets don’t seem to be reacting positively or negatively to good or bad economic news in the way one would expect.  Instead of making decisions based on the likelihood that the economy will expand, investors seem most intent on watching the Federal Reserve and federal government for signs that the forced inflation of their assets will come to an end.

Even those who aren’t directly tapped into the government-corporate money flow take comfort in the idea that smart people with access to data and power can ensure that the economy hums along… sometimes slowing, sometimes bucking, but going forward as smoothly as reality will allow.  As comforting as it may be, that’s a fool’s belief.  Ultimately, the economy depends on your actions and mine and those of your neighbors and those of people around the world whom you will never even know exist.  People who could accurately predict the course of all of those decisions wouldn’t be government functionaries or even central bankers. They’d be quadrillionaires.

Take a moment to ponder this Washington Post article, as it appeared in the Providence Journal:

Two years ago, top officials at the Federal Reserve mapped out a strategy for withdrawing the central bank’s unprecedented support for the American economy.  

The official communiqué was titled “Policy Normalization Principles and Plans,” and it was supposed to serve as a rough outline for the tenure of newly installed Fed Chair Janet L. Yellen. Essentially, it consisted of two basic parts: Raise interest rates and shrink the central bank’s massive balance sheet.  

But now, both of those steps are being called into question as Fed officials grapple with an economy that appears to be stuck in first gear. Instead of executing its exit strategy, the Fed is confronting the possibility that the dramatic measures it took to safeguard the recovery will remain in place indefinitely.

When your plan consists entirely of backstopping and saturating the fortunes of financially powerful interests, you shouldn’t be surprised when those interests use their leverage to make it extremely difficult to turn off the spigot.  Once such a policy has been implemented, in the absence of a courageous will that central planners inevitably lack, it cannot be stopped, and it will not be stopped until the whole scheme collapses.

That collapse will take a huge amount of the wealth from these powerful interests, but it will most hurt everybody else, living much closer to the margin of survival.  Then, those in government and central banks will have another opportunity to decide whether to allow us to work out the economy’s problems through our individual decisions or to protect their wealthy friends again, as after the last crash.

I know which way I’ll continue to bet until America decides to decrease the power of the federal government and cut the strings that are pulling us toward central plans.

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Social Services & Negotiating How Much to Take from Others

Sometimes it’s helpful to put stories in chronological order, rather than news-report order, as with this one, from today’s Providence Journal, concerning panhandling and homelessness in Providence:

Complaints about vagrancy, open drug-dealing and drinking exploded after Mayor Jorge O. Elorza decided months ago to stop enforcing ordinances against aggressive panhandling and loitering.

And now the news is that we’ve got Democrat Joseph Paolino getting the heartless 1% treatment because he’s only looking to get $100,000 from the Downtown Improvement District for social workers, along with jobs for two panhandlers, a free apartment for use of a homeless shelter, and up to $5 million in state taxpayer money, in combination with a whole new ordinance that would be even broader than the ones the mayor isn’t enforcing (stopping all transactions through a car window).  The activists protesting Paolino’s PR event have a more comprehensive list:

Less enforcement of minor criminal offenses against people who are poor; more jobs for panhandlers; funding for 150 housing vouchers; drug and alcohol treatment; and amenities such as a day center, public bathrooms and free food distribution. They want the Rhode Island Public Transportation Authority bus terminal to remain.

The core of this proposal is to double down on the policy approach that created the controversy (non-enforcement) and to add into the mix amenities that will draw even more vagrants, dealers, and loiterers to the area.  The protesters chanted, “Whose city? Our city!,” and they sure want it to be evident in the public square each and every day.

In short, the only solutions on the table, apparently, involve a negotiation over how much taxpayers have to pay for how much additional imposition.  Both parts of the plan are sure to exacerbate the underlying problem: namely, a domineering government that strangles the private sector and creates incentives not to work or bring behavior within a tolerable range.

We need another approach that doesn’t treat people as categories or as social-workers’ statistics, but as free individuals (from independent families) who can determine their own destinies in a community of mutual respect and charity.  The longer we deny this necessary change of perspective, the more the government plaque will build up in society’s arteries, making it more and more difficult to clear them.

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Start the Clock on UHIP Consequences

As Ted Nesi reports, the state’s Unified Health Infrastructure Project (UHIP) goes live, today.  Much of the focus has been the cost overruns to get the new software system active — nearing a half-billion dollars if the state gets approval from the federal government for some final additions.  But Rhode Islanders should be disconcerted by the vagueness of the talk:

But in an interview last week, EOHHS Deputy Secretary Jennifer Wood was adamant that the next year of UHIP spending will come nowhere near $124 million. She described the amount as an opening bid in months of discussions with federal and state officials over how many additional tools should be added to the system. …

“This is an all-in, integrated system,” [Deputy Secretary of Administration Wayne] Hannon said. “It includes basically one-stop shopping for anybody who could be eligible for these services in the state of Rhode Island. I believe it’s the first … fully integrated system [in the country].”

That’s Rhode Island: first in the nation for cutting-edge government, even though our experience had been that it mainly cuts into the private sector, families’ independence, and our quality of life.  What we should be asking is what kind of “tools” we’re talking about, here, especially since that cost is nearly what the state initially estimated for the entire project.

The bureaucrats are touting an expected reduction of improper payments, as the state is better able to determine actual eligibility, but the effect is likely to be opposite.  There’s a reason they call it “one-stop shopping.”  The idea is to ensure that nobody misses any benefits for which they’re eligible, even if they don’t know they need them.  It’s part of the “company state” push by governments in blue states to make public services the central industry bolstering an area that has lost its ability to compete in the global market, for whatever reason.

Of course, being on the cutting edge of the next step in government domination means Rhode Islanders will have the privilege of providing data for other states in the future.  So, we’ll have to wait and see whether the welfare roles decrease or increase, just as Medicaid enrollment shot up with the implementation of the health benefits exchange (HealthSource RI).  Naturally, the disclaimer is that the state government will have a variety of methods (and a whole lot of incentive) to obscure the reason for any budget-busting increases.

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Two Steps Down Our Health Care Road

It sure was good of the British to embark on socialized medicine some decades ago.  If Americans were inclined to learn lessons from failed left-wing experiments, then this would be a great one:

Hospital leaders in North Yorkshire said that patients with a body mass index (BMI) of 30 or above – as well as smokers – will be barred from most surgery for up to a year amid increasingly desperate measures to plug a funding black hole. The restrictions will apply to standard hip and knee operations. …

Under the latest restrictions, patients in the catchment area who have a BMI of 30 or more will be barred from routine surgery for non-life-threatening conditions for a year, although they may secure a referral sooner if they shed 10 per cent of their weight. …

Smokers who refuse to quit will have planned operations postponed for six months, but may be included on surgeons’ waiting lists earlier by proving they have given up for at least eight weeks.

From this point, the argument could go in multiple ways.  “Why should we all finance the bad behavior of some people?” To which others might respond, “Who gets to pick these particular bad behaviors rather than, say, promiscuous sex?”  Alternately, “Are you saying that wealthy obese people should be able to buy knee operations while poorer people can’t get life-saving treatments at the same cost?”  To which the response might be, “Doesn’t this zero-sum game only arise because government has taken over the industry?”

The more immediate observation, though, is that progressives never seem to want us to get to these central questions until they’ve changed the system in their favor.  Prior to passage of ObamaCare, they proclaimed it a lie that the law might lead to panels that choose who gets operations and who doesn’t.  It will only be after the system is such that almost everybody is dependent on government for health care (or at least believes as much) that we’ll be permitted to have the discussion of whether government control is worthwhile with this as one of its consequences.

But that’s what puts the “progress” in “progressive”: One suspects they know what the end game looks like, but they want to ensure that the rest of us “progress” along convenient stages of finding out.

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“Affordable” Farmland Means You Pay for Government Grabs

Naturally — no doubt in harmony with the philosophies of its core reader base — a Providence Journal article about the state government’s new program to buy farmland and sell it to beginner farmers at “a steep discount” is celebratory.  What’s not to love about a program that takes money away from people in order to heavily subsidize a space-intensive occupation to support businesses that may simply not make sense in this state while giving the government a new pretense for buying up land and even leasing it out as if to sharecroppers?

As I wrote a couple of weeks ago on this issue, I love the idea of nearby farms and local produce, but subsidizing them benefits the aesthetics and consumer choices of relatively wealthy people.  The way to preserve farmland would be to allow Rhode Islanders to keep more of their money and to lighten regulations so the economy could boom, thus leaving more room in household budgets for the experiential and quality benefits of buying local.

The cost isn’t the only red flag about such programs, though.  Department of Environmental Management Director Janet Coit insists that this program will be voluntary both for the farmer looking to sell his land and the farmer wishing to buy or lease it, but a “for now” is implied.  The 2010 document I cite at the link above, which further research has shown to be a starting point for much of this conversation, includes proposals for making “affordability permanent.”

The document doesn’t explain what that means, although a reader can reasonably infer the drafters were contemplating possibilities should state and federal budgets become too tight for tax-money handouts.  The first suggestion is to put language in “conservation easements” that would “give conservation organizations the right of first refusal to purchase the land at agricultural value.”  An FAQ from the state Agricultural Lands Preservation Commission defines “agricultural value” as the value of land after it has been reduced to account for the restriction that owners can only use it for farming.

As the Providence Journal article points out, that could be an 80% discount off the fair market value.  So, before a farmer could sell his land, a non-profit, a land trust, or even the state government would have to be given the option of buying it for 20% of its value.  As for the ultimate buyers, they’ll surely be restricted in what they can do, probably with requirements to follow government preferences, with allowance for bureaucrats to change the deal with the political winds.

Whether such additions to the program are currently on somebody’s secret to-do list or not, the example should remind us of the danger of taking such steps for feel-good government programs.  Once government is entrenched in the process of buying, selling, and operating farmland, government effectively controls the industry, and once we’ve decided this is a legitimate activity, we can be sure government will look to apply it to other industries, as well.

After all, what’s not to love?

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Every Event Comes with Opportunity

A key question I’ve asked myself as I’ve tried to work through the appropriate response to our awful choices for the upcoming presidential election is what position each candidate would put the conservative movement in as president.  Even if we could count on them both to behave in exactly the same fashion, how they got to the presidency and how they are perceived could have a dramatic effect on the ability of people with a conservative view of policy to advance their beliefs.

In that regard, Ian Tuttle gives an important admonition that we ought to be prepared in the event of a Hillary Clinton victory:

Four years of Hillary Clinton will be enormously painful for conservatives. But millions of non-ideological Americans are going to be pained by it, too, and looking for an alternative. When 2020 rolls around, conservatives should have one to offer.

It has become clear beyond denial that mal-education means we can no longer count on the lessons of tradition, patriotism, and common sense to provide the answer for the second part of “not x, therefore y.”  It isn’t enough for us to say that things have gone wrong; we need to tell people how to set them right.  The hard part is that people won’t change their minds about the narrative with which they’ve been indoctrinated until we find that remnant of common sense that must exist by virtue of their being human beings.

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Escaping Backwards Thinking in Education

Future generations may study the education system in our day as a lesson in how difficult it is to make government do the right thing when there are entrenched interests involved.  Indeed, reading a post by Annie Holmquist on the Foundation for Economic Education site, I wondered if our progeny will think us downright backwards.

Quoting a former public-school-teacher-turned-homeschool-mom named Nikita Bush, The Monitor explains this movement:

“Despite the promises of the civil rights movement, ‘people are starting to realize that public education in America was designed for the masses of poor, and its intent has been to trap poor people into being workers and servants. If you don’t want that for your children, then you look for something else,’ she says.”

Bush is not alone in thinking that the public schools are keeping minority children from reaching their potential. According to a poll released in 2016 by The Leadership Conference Education Fund, minority parents “strongly reject the notion that students from low-income families should be held to lower standards.” In fact, “Nine-out-of-ten African Americans and 84 percent of Latinos disagree that students today work hard enough and instead believe that students should be challenged more to help ensure they are successful later in life.”

According to Holmquist’s post, black students who are homeschooled perform as well or better than the national average in reading, language, and math, and the contrast with black public school students is stunning.  (Having not reviewed the underlying research, I should note the possibility that there may be factors affecting the numbers, such as the relative income of the group.)

The thing that seems backwards, though, is that only in Georgia is it possible for parents to work together for a sort of homeschooling co-op.  How did we get to a place in a supposedly free country in which the government’s underlying assumption is that parents cannot be trusted to educate their children?  That doesn’t strike me as the proper relationship between government and the governed.

Of course, it may be an exercise in unreasonable optimism to think that future generations will have a better sense of how that relationship ought to be structured.

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When the Tide Has Nowhere to Turn

Although his title may not really capture the point, Jim Geraghty is on to something with “Crazy Theory: This Year the Right Is Winning the Culture Wars.”  Here’s one item of his evidence:

Target Corp. said it will spend $20 million to add a private bathroom to each of its stores by next year, after customer protests of its policy allowing transgender individuals to use whichever restroom corresponds with their gender identity.

My wife mentioned to me, the other day, that at least one Target store in the area had porta-potties outside, with some sort of cleaning station, and when her friend asked what they were for, an employee told her they’re “for the transgendered.”  My first reaction was to suggest that’s what happens when there’s such disconnect between corporate big-wigs and the people.  Making a grand politically correct statement using an entire chain of stores seems very important when perched at the cocktail party top, but as with universities’ capitulating to the whiny brats among their student population, the broader public has different views.

That is to say that Target has learned what happens when your leadership really does have contempt for a plurality of views.

The incident brings to mind Plato’s description of the steps by which an oligarchy deteriorates into a democracy:

This state, then, is in the same precarious condition as a person so unhealthy that the least shock from outside will upset the balance or, even without that, internal disorder will break out.  It falls sick and is at war with itself on the slightest occasion, as soon as one party or the other calls in allies from a neighbouring oligarchy or democracy; and sometimes civil war begins with no help from without.

In Plato’s reasoning, the elites of the oligarchy have become so soft and unlike their fellow countrymen that when anything happens to throw them all together, “the poor man, lean and sunburnt,” will observe of his social betters that they “are rich because we are cowards.” Applying this to Geraghty’s thesis, we might say that the lesson isn’t that “the Right is winning,” but merely that the Left hasn’t yet won — meaning that the self-righteous elite cannot yet impose its every will and fashion on the country with no consequence.

Another way to phrase it would be to say that the cultural tide appears to have hit progressive dams, with none of the releases that a free and equal representative democracy has in place to allow for self governance.  Unfortunately, the turmoil has brought Donald Trump to the forefront, so the next question will be what happens if the dams should hold in November, bottling up the pressure, or if they should break more expansively than is healthy for our society.

Either way, although the Left might be said to be losing, I’m not sure those of us on the right will really consider ourselves to be winning.

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The Practical Distance Between America and Venezuela

A post on by Daniel Greenfield got me to thinking why the United States couldn’t suffer a similar fate to Venezuela’s:

After the fun of electronics stores forced to discount televisions at gunpoint, there were no more televisions. And no more cars. Then no more toilet paper, milk and other basic necessities.

The Socialist government tried to solve its money problem by printing more money. But it wasn’t able to pay for the money it wanted to print because of the inflation which officially did not exist.

Greenfield goes on to note that some American politicians propound policies of a similar mindset, making one wonder whether there’s something in the American character that will eventually stop the process or it’s just a matter of luck and the erosion of principle.

The first argument of distinction between our country and the one that Hugo Chavez ruined is that we’re wealthier, and in a broader way. But that just means we have farther to fall, which could mean more time or it could only necessitate a bigger mess up… say a decade of quantitative easing and massive federal debt combined with a regulatory state that makes it more difficult for people to work off the extra burdens and a welfare state that promises to buy them off if dependence on government is an option they’re willing to entertain.

A second argument, related to the fact that we have more wealth and room to fall, is that we have a culture of self-reliance and rebelliousness. Well, we’re arguably engaged in an experiment to discover how few generations it takes to get out of the habit of self-reliance. And as for rebelliousness, that’s well and good to talk about and believe in, but the proof is in the doing.

Ultimately, if it can’t happen here, we better get to proving it soon.

 

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When the Opposition Is Evil

This short Instapundit post by Sarah Hoyt caught my attention for two reasons:

The Problem With Politics Today? The Opposition Must Be PUNISHED! This is what comes of confusing civil law and religion. When your politics are your religion, those who don’t agree are evil.

First, the Tom Knighton post on PJMedia to which she links is about a “small town of less than 20,000 people” in which residents recently “voted down a tax increase,” and the social media reaction of some who wanted to punish voters.  If anything, Knighton’s example looks mild compared with the open, broad, and organized aggression we’ve seen in Tiverton after merely reducing a tax increase to 0.9%.

Second, the mention of “evil” brought to mind the reaction of RI Future writer Steve Ahlquist when I wondered why the Central Falls school district insists that substitute teachers have a “commitment to social justice”:

Because a commitment to social injustice is evil?

One can see the level of zealotry, here, by the assumption that a substitute teacher who would not claim to have an active “commitment to social justice” must therefore have an active “commitment to social injustice.”  As I argued yesterday, progressives believe everything must be political all the time, whereas conservatives are comfortable with the idea that some areas of human activity can be distinct from other areas.  A substitute teacher, for example, can keep the classroom safe and maybe even advance students’ learning without having to invoke the doctrine of “social justice.”

My ensuing discussion with Ahlquist became mired in his trying to have it both ways.  On the one hand, he wanted to seem less like a zealot by implying that “social justice” isn’t a political ideology at all, but simply a term for such beliefs as all Americans agree are obvious and correct.  On the other hand (and here he broke off conversation before we could really explore this inquiry), he clearly has a progressive’s concept of what “social justice” means, as does the Central Falls district, inasmuch as the job ad in question had other telling phrases, like “cultural pride.”

Honestly, I think there’s a real issue evident in progressives’ inability to structure their thoughts and beliefs logically as a step toward assessing and comparing contrary thoughts and beliefs.  What they believe is simply correct… because it is… and in order to believe differently, one must be evil.  And if you’re nice, or at least willing to engage in discourse, while being evil, then you are, as Ahlquist repeatedly accused me of being, “not an honest interlocutor.”

The attractiveness of this approach is obvious.  One’s own beliefs are so plainly correct that none can legitimately argue against them.  The opposition’s implicit evil justifies just about any strategy required to win political fights, and if the good guys should lose, they are further justified in lashing out to punish the maleficent victors.

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The Inequality Narrative

Not to pick on Ted Nesi, because he’s only trying to promote his work using a click-bait political narrative, but I had to ask him what the insinuation was when he tweeted that “just 5 of RI’s 27 best-funded politicians are women.”  Do people who attempt to buy Rhode Island politicians put sexism before corruption?  Or do fewer women run for office?  Or are the specific women who are currently politicians in Rhode Island not as effective at or interested in fundraising?

Nevermind.  Let’s all just assume sexism.

The problem is that such statements are part of what turns straight reporting of the news into another brick in the wall of a political narrative serving one side — in this case, the glass-ceiling-breaking Democrat presidential nominee Hillary Clinton (who will enter office with a large percentage of the population thinking she’s the archetype of corruption and thinking more of the cliché to “break glass in case of emergency”).  The entire inequality narrative, as Thomas Sowell argues, ought to be retired before it does anymore divisive harm:

People like Hillary Clinton can simply grab a statistic about male–female income differences and run with it, since her purpose is not truth but votes. The real question, however, is whether, or to what extent, those income differences are due to employers paying women and men different wages for doing the very same jobs, for the very same amount of time.

We do not need to guess about such things. Many studies have been done over many years — and they repeatedly show that women and men who work the very same hours in the very same jobs at the very same levels of skill and experience do not have the pay gaps that people like Hillary Clinton loudly denounce.

As far back as 1971, single women in their thirties who had worked continuously since high school earned slightly more than men of the same description. As far back as 1969, academic women who had never married earned more than academic men who had never married.

For the foreseeable future, I’m afraid, “equality” for women will continue to mean that women must have all the same positive outcomes as men, no matter what decisions they make.  If that doesn’t sound like “equality” to you, clearly you need to be reeducated.

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The Administrative Parasite or the Bureaucratic Supernova

Although the chart is from a post by Charles Hugh Smith from 2010, I saw this for the first time on Twitter, yesterday, and I think it captures an important dynamic:

lifecycle-bureaucracy

 

In summary, a new agency, department, office, program, or whatever you want to call it starts off with enthusiasm at some new mission (albeit one probably being grabbed from the private sector).  Early returns in services are relatively good, because employees are enthusiastic and not yet dug in.  It still seems like something special.

As things go on, though, the original mission becomes commonplace, and the organization looks to expand, but eventually finds its limit.  Meanwhile, the amount of effort and number of employees devoted to the institution itself grows.

Eventually, the budget hits its limits, and cuts might even become necessary.  But the administration is habit and the employees are dug in, so rather than downsize those, the organization concludes it simply can’t serve as many people or do as much of whatever it was doing, until it reaches the point that there’s hardly any mission left.

Smith emphasizes:

Although it seems “impossible” in an era where the Federal Reserve just conjures up $1 trillion and the Federal governments sells $1.3 trillion in bonds every year to fund its ballooning deficit, bureaucracies can and will implode.

And this paragraph from a related post Smith wrote in 2011 should sound very familiar to the Rhode Island ear:

Real reform would mean powerful constituencies would have to take real reductions in staffing, power, benefits and in their share of the national income. Rather than reveal this double-bind–reform is impossible but the Status Quo is unsustainable–the institution deploys its gargantuan resources to laying down a smoke-screen of bogus “reforms,” distracting sideshows and ginned-up statistics to “prove” that “we’re really changing things around here, yes-siree, and things are getting better and better, every day and in every way.”

Sadly, folks, it’s going to be up to us to defuse the pressure before the star explodes.

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Central Falls Schools Literally Hiring SJWs

Anybody who’s glanced around the rightward side of the Internet and social media will have come across the pejorative acronym, “SJW.”  That stands for “social justice warrior,” and it’s pejorative because it connotes excessive and superficial self-righteousness, combined with a lack of self awareness that would be comical if the SJWs weren’t able to hurt people.

Unfortunately, in a world with an entire generation stewed in political correctness (an abyss into which college campuses appear to have fallen almost completely), SJWs are not as powerless as they would be in a sane world.  Still, it’s jarring to see a public school district in Rhode Island openly advertising jobs for them, although somehow that fact didn’t find its way into Linda Borg’s glowing article on the plan in today’s Providence Journal:

This year, a pool of 15 substitute teachers will be hired to serve the full 180-day school year. They will be offered a week of training this month and repeated professional development during the school year. They will also be mentored by certified teachers. And they will be offered a sweetener — either health-care benefits or $130 per day (typical pay is $100 per day).

The “teaching fellows” would also have an opportunity to lead after-school activities, although permanent teachers would have the first crack at these positions.

In exchange, they will be asked to learn about the school’s mission and values, to become part of a team of valued educators committed to high standards.

That such a plan seems like radical innovation may be a testament to just how rigid and averse to innovation the public school system is, but another layer becomes visible if one looks at the job ad for these positions.  Note, first, that the actual title the district has given these positions isn’t “teaching fellows,” but “Warrior Fellows” (Warriors being the school mascot).  Now consider some language from the ad:

The Warrior Fellowship will require passionate leaders to serve as education and social justice advocates and mentors in all six Central Falls schools while at the same time helping to bridge the gap between the academic and social-emotional support our students and families need in their schools and community.

Fellows are expected to “go through a rigorous training program” and “weekly and monthly workshops and seminars” that will help them develop “the courage and passion to inspire change in our schools, influence the lives of our students, and become advocates for the city of Central Falls.”  Among the areas on which they can focus is “Cultural Pride,” and we can infer that “Western Culture” is not what’s meant.  Among the job requirements (third on the list and the second mandatory one) is “commitment to social justice and urban education.”

In short, the school department in Central Falls, which is largely funded with state-taxpayer money, is literally looking to hire and train “social justice Warriors.”  Thus does Rhode Island endeavor to see just how far into the abyss it can dive.