School Canceled Because of Coronavirus? A Homeschooler Offers Some Tips

The COVID-19 coronavirus is in the news with new cases reported every day. The list of schools, colleges, and other institutions suspending their efforts is also adding up. But there’s one education sector that may get away with minimal disruption: homeschoolers. Families that take responsibility for their kids’ education have a distinct edge in terms of flexibility and adaptability when it comes to unexpected events like … well … a worldwide pandemic that has people on edge.

“Closing schools and using internet-based teleschooling to continue education” was the scenario envisioned by the Centers for Disease Control and Prevention’s Dr. Nancy Messonier in a February 25 press conference. “You should ask your children’s school about their plans for school dismissals or school closures. Ask if there are plans for teleschool.”

Teleschool? Homeschoolers are so on that. Or if they’re not into teleschooling, they have a stack of books and papers, kitchen-counter science experiments, video lectures … The list goes on, and much of it adds up to the “social distancing measures” of which teleschooling is supposed to be part.

What’s “social distancing”? As Messonnier noted, social distancing is “designed to keep people who are sick away from others.” That means breaking up large gatherings where germs can be shared and spread.

Discouraging gatherings is an important move from a public health perspective, but it’s enormously disruptive to businesses, government bodies, and organizations that are designed around assembling large numbers of people in one place. That means big challenges for, among other institutions, traditional brick-and-mortar schools. Homeschoolers, however, have an edge because their efforts are not inherently constructed around large gatherings.

That doesn’t mean that homeschoolers never get together. Contrary to accusations from critics, family-based education is not an inherently solitary venture.

Homeschooling often involves group lessons that take advantage of specialized expertise, collaborative projects, field trips with homeschooling associations, sports teams, and more—which means that homeschoolers have changes to make in a time of pandemic, too, in terms of reducing or eliminating outings and activities. But that doesn’t mean cutting down on education; these days, there are loads of relatively easy work-arounds for homeschooling families.

If you’re new to family-based education, and especially if you’re busy with your own remote work, you may find it best to go with a comprehensive online program, like a virtual publicly-funded charter school or tuition-charging private school.

Virtual private schools are available anywhere in the United States, while the availability of charters depends on your local laws. Arizona, where I live, maintains a list of virtual charter schools, but you’ll need to do a bit of research for your own state.

Besides full schools, the Internet is a treasure-trove of learning materials that don’t require you to trek to a bookstore, a lecture hall, or even to wait for package delivery. Classic literature is available for free in electronic format through Project Gutenberg, Khan Academy has long since expanded beyond its original mission of delivering math lessons, the American Chemical Society gives away a complete chemistry curriculum, and a variety of lesson plans are freely available from the National Endowment for the Humanities’ Edsitement. If you’re interested, I’ve prepared a downloadable list of resources.

I’ve never met a conference software that I’ve loved—video sometimes freezes, audio drops out, and connections fail. That said, my son has used both Blackboard and Zoom in the course of his lessons, and he and his peers as young as 10 or so took to it naturally, even troubleshooting glitches as needed. Conferencing software will accommodate presentations, feedback, shared screens, and other means of simulating a classroom across distances and without putting students in one place to share germs. Teachers and students can even transfer files back and forth.

Skype is an excellent stand-by for online meetings with teachers. Yes, your kids can be verbally quizzed in a foreign language across that platform while the teacher looks on to check for cheat sheets or other shortcuts. The kids might then receive messaged feedback through the same software.

For teamwork on projects, I think working online may be more effective than getting a bunch of kids together in one room. Recently, I got to listen to a bunch of 14- and 15-year-olds collaborate on a script for a skit that they edited in Google Docs. For presentations, they’ve worked the same way in Google Slides. One nice feature is that the technological solutions really cut down on the “I left my work at my friend’s house” factor. No, you didn’t, kid; it’s sitting in the cloud.

(Incidentally, collaborative software doesn’t make teenagers act any less like teenagers. If forced to listen in, you will still want to bang your head on a table.)

When it comes to sharing short pieces of work, art, and the like, my son and his friends sometimes take photos of their efforts and text them to each other or to an instructor. That’s a quick and easy solution in many cases when uploading and downloading documents is more effort than necessary.

The hard part isn’t finding work for your home students to do; it’s keeping them focused. Every child is different, and some are more self-directed than others.

Yes, you will have to check on them even if you’re not directly administering their lessons. That can be a challenge for new homeschoolers, but my experience is that most kids respond better to mom and dad than they do to teachers they barely know and won’t see after the year’s end.

Socializing is where the “social distancing” recommended for our virus-ridden times bites deep. But I have to imagine that cell phones, social media, and video chat make easier work of dealing with the requirements of the pandemic than what our ancestors suffered when they dodged polio or the Spanish flu. The kids can all complain to each other over their favorite apps about the privations they’re suffering in these hard times.

Fast delivery, downloadable books, and streaming video do away with a bit of the sting, too. The kids can still consume current media and discuss their favorite shows and novels—just not face-to-face for a while.

And here’s the thing. If you try homeschooling, you may discover that it’s not just a good way to keep COVID-19 at bay, but an effective approach to education more generally and a good fit for your family. If so, well, welcome to a happy, healthy, and growing club.

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School Canceled Because of Coronavirus? A Homeschooler Offers Some Tips

The COVID-19 coronavirus is in the news with new cases reported every day. The list of schools, colleges, and other institutions suspending their efforts is also adding up. But there’s one education sector that may get away with minimal disruption: homeschoolers. Families that take responsibility for their kids’ education have a distinct edge in terms of flexibility and adaptability when it comes to unexpected events like … well … a worldwide pandemic that has people on edge.

“Closing schools and using internet-based teleschooling to continue education” was the scenario envisioned by the Centers for Disease Control and Prevention’s Dr. Nancy Messonier in a February 25 press conference. “You should ask your children’s school about their plans for school dismissals or school closures. Ask if there are plans for teleschool.”

Teleschool? Homeschoolers are so on that. Or if they’re not into teleschooling, they have a stack of books and papers, kitchen-counter science experiments, video lectures … The list goes on, and much of it adds up to the “social distancing measures” of which teleschooling is supposed to be part.

What’s “social distancing”? As Messonnier noted, social distancing is “designed to keep people who are sick away from others.” That means breaking up large gatherings where germs can be shared and spread.

Discouraging gatherings is an important move from a public health perspective, but it’s enormously disruptive to businesses, government bodies, and organizations that are designed around assembling large numbers of people in one place. That means big challenges for, among other institutions, traditional brick-and-mortar schools. Homeschoolers, however, have an edge because their efforts are not inherently constructed around large gatherings.

That doesn’t mean that homeschoolers never get together. Contrary to accusations from critics, family-based education is not an inherently solitary venture.

Homeschooling often involves group lessons that take advantage of specialized expertise, collaborative projects, field trips with homeschooling associations, sports teams, and more—which means that homeschoolers have changes to make in a time of pandemic, too, in terms of reducing or eliminating outings and activities. But that doesn’t mean cutting down on education; these days, there are loads of relatively easy work-arounds for homeschooling families.

If you’re new to family-based education, and especially if you’re busy with your own remote work, you may find it best to go with a comprehensive online program, like a virtual publicly-funded charter school or tuition-charging private school.

Virtual private schools are available anywhere in the United States, while the availability of charters depends on your local laws. Arizona, where I live, maintains a list of virtual charter schools, but you’ll need to do a bit of research for your own state.

Besides full schools, the Internet is a treasure-trove of learning materials that don’t require you to trek to a bookstore, a lecture hall, or even to wait for package delivery. Classic literature is available for free in electronic format through Project Gutenberg, Khan Academy has long since expanded beyond its original mission of delivering math lessons, the American Chemical Society gives away a complete chemistry curriculum, and a variety of lesson plans are freely available from the National Endowment for the Humanities’ Edsitement. If you’re interested, I’ve prepared a downloadable list of resources.

I’ve never met a conference software that I’ve loved—video sometimes freezes, audio drops out, and connections fail. That said, my son has used both Blackboard and Zoom in the course of his lessons, and he and his peers as young as 10 or so took to it naturally, even troubleshooting glitches as needed. Conferencing software will accommodate presentations, feedback, shared screens, and other means of simulating a classroom across distances and without putting students in one place to share germs. Teachers and students can even transfer files back and forth.

Skype is an excellent stand-by for online meetings with teachers. Yes, your kids can be verbally quizzed in a foreign language across that platform while the teacher looks on to check for cheat sheets or other shortcuts. The kids might then receive messaged feedback through the same software.

For teamwork on projects, I think working online may be more effective than getting a bunch of kids together in one room. Recently, I got to listen to a bunch of 14- and 15-year-olds collaborate on a script for a skit that they edited in Google Docs. For presentations, they’ve worked the same way in Google Slides. One nice feature is that the technological solutions really cut down on the “I left my work at my friend’s house” factor. No, you didn’t, kid; it’s sitting in the cloud.

(Incidentally, collaborative software doesn’t make teenagers act any less like teenagers. If forced to listen in, you will still want to bang your head on a table.)

When it comes to sharing short pieces of work, art, and the like, my son and his friends sometimes take photos of their efforts and text them to each other or to an instructor. That’s a quick and easy solution in many cases when uploading and downloading documents is more effort than necessary.

The hard part isn’t finding work for your home students to do; it’s keeping them focused. Every child is different, and some are more self-directed than others.

Yes, you will have to check on them even if you’re not directly administering their lessons. That can be a challenge for new homeschoolers, but my experience is that most kids respond better to mom and dad than they do to teachers they barely know and won’t see after the year’s end.

Socializing is where the “social distancing” recommended for our virus-ridden times bites deep. But I have to imagine that cell phones, social media, and video chat make easier work of dealing with the requirements of the pandemic than what our ancestors suffered when they dodged polio or the Spanish flu. The kids can all complain to each other over their favorite apps about the privations they’re suffering in these hard times.

Fast delivery, downloadable books, and streaming video do away with a bit of the sting, too. The kids can still consume current media and discuss their favorite shows and novels—just not face-to-face for a while.

And here’s the thing. If you try homeschooling, you may discover that it’s not just a good way to keep COVID-19 at bay, but an effective approach to education more generally and a good fit for your family. If so, well, welcome to a happy, healthy, and growing club.

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ICE Scam Leads to Student Deportations 

More than 250 foreign students have been arrested by Immigration and Customs Enforcement (ICE) in a sting operation against “pay-to-stay visa mills”—fake universities that handle transcripts and paperwork so that foreign students can maintain their visa status without actually attending college.

But sources connected to the students say the operation, which involved ICE setting up its own fake university, lured in a number of students who had done nothing wrong. Some of those students were even tricked into quitting legitimate schools in favor of the feds’ fake university. Meanwhile, real visa mills—the operation’s supposed target—remain unaffected.

The latest chapter in the story began in 2015, when ICE decided to crack down on visa mills. The agency created the University of Northern New Jersey, a fake college that held no classes and offered no instruction. If students paid recruiters between $3,000 and $12,000, they could “enroll” and show that they were taking the course load needed to satisfy the requirements of their F-1 student visas and, more importantly, to obtain Curricular Practical Training (CPT) status.

Usually, F-1 recipients are limited to 20 hours of weekly on-campus employment. But CPT status allows those who have completed one year of academic work to take jobs off campus if the work is integral to their area of study. For instance, nursing students who need practical training to complete the requirements for their degrees can work in a hospital and get paid for it.

The New York Times reported in 2016 that some University of Northern New Jersey students genuinely didn’t know what they were getting into. Many students had obtained jobs but didn’t win an H-1B visa in the annual lottery, which gets twice as many applicants as there are visas handed out each year. So the CPT became a stopgap way of obtaining work status until they could try again for an H-1B.

The sensible policy response would have been for Congress to raise or scrap the annual H-1B cap so that foreign students with job offers are assured of work authorization. This would instantly throw all the visa mills out of business. But given the enthusiasm for enforcement, ICE decided to play detective via elaborate stings.

The 2015 New Jersey sting resulted in over 1,000 students losing their visas and being thrown out of the country. But according to Rahul Reddy, a Texas attorney who specializes in employment-based immigration law, the primary targets were professional recruiters acting as middlemen between students and fraudulent universities.

ICE’s latest sting, which started just as the University of Northern New Jersey one was wrapping up, is different. This time, Reddy insists, the agency went to elaborate lengths to target students themselves.

In 2016, ICE created the University of Farmington, which was physically located on Northwestern Highway in Southeast Michigan—a major commercial thoroughfare with doctor’s offices, real estate companies, restaurants, and more. Its website billed the now-disbanded university as a STEM school offering various graduate degrees and claimed it had a history dating back to the 1950s. Notably, it also claimed that the school was Students and Exchange Visitor Program (SEVP) approved, referring to a Department of Homeland Security (DHS) list of all the schools that immigration authorities recognize. Separately, ICE enlisted an accreditation agency to list the school on its website, according to the Detroit Free Press Niraj Warikoo, who also found that the university was incorporated by Michigan’s Department of Licensing and Regulatory Affairs.

All this meant that a foreign student who looked at the university website would have had no reason to suspect that it was an illicit visa mill. ICE even coordinated with DHS to ensure that the enrolled students would show up on the Student and Exchange Visitor Information System (SEVIS), a federal database that lists all foreign students in good standing with immigration authorities. For foreign students looking for an American education, SEVIS is the ultimate seal of official approval.

With all this architecture in place, ICE agents impersonating university officials started recruiting students by offering them cheaper courses and quicker processing of their CPT status, says Jay Talluri, president of the Telugu Association of North America, an Indo-American group. Undercover ICE officials also offered a hefty commission to students, mostly from India, who recruited their friends. In all, it managed to enroll 600 people.

Accepting the commission was clearly illegal, since the terms of the F-1 visa bar foreign students from working off-campus for pay, especially in areas unrelated to their studies. But ICE didn’t spare those on the other end of those recruitment efforts, either. It terminated the SEVIS authorization of everyone enrolled in the University of Farmington on the evening of January 29, 2019. Early the next morning, it started making house arrests.

By December, 250 people had been snagged. (The rest of the student body has likely fled the country.) About 80 percent of the 250 arrestees were granted “voluntary” departure and banned from the United States for many years. Another 10 percent are being deported. The rest are contesting their removal orders.

ICE claimed in its indictment that “each of the foreign citizens who ‘enrolled’ and made ‘tuition’ payments to the University” knew that the program was “not approved by the DHS” and was “illegal.” This is simply not true. The university was listed as accredited on state and federal sites. Moreover, the DHS gave enrollees SEVIS authorization, which should not have been possible if it weren’t an authorized school.

Indeed, Warikoo notes that some of the students jumped to the University of Farmington from schools that had lost accreditation for any number of reasons. They likely thought switching would allow them to fulfill their visa requirements. (It’s hard to say for sure, because none of the students are talking to the press.) Others actually tried to transfer out of the University of Farmington when they realized that it was not holding classes and they were making no progress toward their diplomas. But ICE has not spared them either.

Even more troubling is that ICE actually lured some students from legitimate universities with promises of cheaper courses. Foreign students are particularly vulnerable to such pitches, because their options to work and pay for their education are severely restricted by visa rules. Hence, many rely on families back home for support and are always on the lookout for ways to reduce the burden on their loved ones. ICE collected millions of dollars in fees from these students, Warikoo reported, and won’t say whether it has any intention of reimbursing them. (ICE did not respond to requests for comment for this story.)

The fundamental question is what the government hoped to accomplish with this elaborate scheme. Even from a pure enforcement standpoint, wouldn’t it make more sense to go after existing visa mills rather than launching new fake institutions? Instead of turning students into recruiters by throwing temptation in their way, ICE could have gone after professional recruiters. Nothing the agency has done so far has put a single illegitimate university out of business.

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ICE Scam Leads to Student Deportations 

More than 250 foreign students have been arrested by Immigration and Customs Enforcement (ICE) in a sting operation against “pay-to-stay visa mills”—fake universities that handle transcripts and paperwork so that foreign students can maintain their visa status without actually attending college.

But sources connected to the students say the operation, which involved ICE setting up its own fake university, lured in a number of students who had done nothing wrong. Some of those students were even tricked into quitting legitimate schools in favor of the feds’ fake university. Meanwhile, real visa mills—the operation’s supposed target—remain unaffected.

The latest chapter in the story began in 2015, when ICE decided to crack down on visa mills. The agency created the University of Northern New Jersey, a fake college that held no classes and offered no instruction. If students paid recruiters between $3,000 and $12,000, they could “enroll” and show that they were taking the course load needed to satisfy the requirements of their F-1 student visas and, more importantly, to obtain Curricular Practical Training (CPT) status.

Usually, F-1 recipients are limited to 20 hours of weekly on-campus employment. But CPT status allows those who have completed one year of academic work to take jobs off campus if the work is integral to their area of study. For instance, nursing students who need practical training to complete the requirements for their degrees can work in a hospital and get paid for it.

The New York Times reported in 2016 that some University of Northern New Jersey students genuinely didn’t know what they were getting into. Many students had obtained jobs but didn’t win an H-1B visa in the annual lottery, which gets twice as many applicants as there are visas handed out each year. So the CPT became a stopgap way of obtaining work status until they could try again for an H-1B.

The sensible policy response would have been for Congress to raise or scrap the annual H-1B cap so that foreign students with job offers are assured of work authorization. This would instantly throw all the visa mills out of business. But given the enthusiasm for enforcement, ICE decided to play detective via elaborate stings.

The 2015 New Jersey sting resulted in over 1,000 students losing their visas and being thrown out of the country. But according to Rahul Reddy, a Texas attorney who specializes in employment-based immigration law, the primary targets were professional recruiters acting as middlemen between students and fraudulent universities.

ICE’s latest sting, which started just as the University of Northern New Jersey one was wrapping up, is different. This time, Reddy insists, the agency went to elaborate lengths to target students themselves.

In 2016, ICE created the University of Farmington, which was physically located on Northwestern Highway in Southeast Michigan—a major commercial thoroughfare with doctor’s offices, real estate companies, restaurants, and more. Its website billed the now-disbanded university as a STEM school offering various graduate degrees and claimed it had a history dating back to the 1950s. Notably, it also claimed that the school was Students and Exchange Visitor Program (SEVP) approved, referring to a Department of Homeland Security (DHS) list of all the schools that immigration authorities recognize. Separately, ICE enlisted an accreditation agency to list the school on its website, according to the Detroit Free Press Niraj Warikoo, who also found that the university was incorporated by Michigan’s Department of Licensing and Regulatory Affairs.

All this meant that a foreign student who looked at the university website would have had no reason to suspect that it was an illicit visa mill. ICE even coordinated with DHS to ensure that the enrolled students would show up on the Student and Exchange Visitor Information System (SEVIS), a federal database that lists all foreign students in good standing with immigration authorities. For foreign students looking for an American education, SEVIS is the ultimate seal of official approval.

With all this architecture in place, ICE agents impersonating university officials started recruiting students by offering them cheaper courses and quicker processing of their CPT status, says Jay Talluri, president of the Telugu Association of North America, an Indo-American group. Undercover ICE officials also offered a hefty commission to students, mostly from India, who recruited their friends. In all, it managed to enroll 600 people.

Accepting the commission was clearly illegal, since the terms of the F-1 visa bar foreign students from working off-campus for pay, especially in areas unrelated to their studies. But ICE didn’t spare those on the other end of those recruitment efforts, either. It terminated the SEVIS authorization of everyone enrolled in the University of Farmington on the evening of January 29, 2019. Early the next morning, it started making house arrests.

By December, 250 people had been snagged. (The rest of the student body has likely fled the country.) About 80 percent of the 250 arrestees were granted “voluntary” departure and banned from the United States for many years. Another 10 percent are being deported. The rest are contesting their removal orders.

ICE claimed in its indictment that “each of the foreign citizens who ‘enrolled’ and made ‘tuition’ payments to the University” knew that the program was “not approved by the DHS” and was “illegal.” This is simply not true. The university was listed as accredited on state and federal sites. Moreover, the DHS gave enrollees SEVIS authorization, which should not have been possible if it weren’t an authorized school.

Indeed, Warikoo notes that some of the students jumped to the University of Farmington from schools that had lost accreditation for any number of reasons. They likely thought switching would allow them to fulfill their visa requirements. (It’s hard to say for sure, because none of the students are talking to the press.) Others actually tried to transfer out of the University of Farmington when they realized that it was not holding classes and they were making no progress toward their diplomas. But ICE has not spared them either.

Even more troubling is that ICE actually lured some students from legitimate universities with promises of cheaper courses. Foreign students are particularly vulnerable to such pitches, because their options to work and pay for their education are severely restricted by visa rules. Hence, many rely on families back home for support and are always on the lookout for ways to reduce the burden on their loved ones. ICE collected millions of dollars in fees from these students, Warikoo reported, and won’t say whether it has any intention of reimbursing them. (ICE did not respond to requests for comment for this story.)

The fundamental question is what the government hoped to accomplish with this elaborate scheme. Even from a pure enforcement standpoint, wouldn’t it make more sense to go after existing visa mills rather than launching new fake institutions? Instead of turning students into recruiters by throwing temptation in their way, ICE could have gone after professional recruiters. Nothing the agency has done so far has put a single illegitimate university out of business.

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Brickbat: Expensive Lesson

San Francisco officials have agreed to pay $369,000 to settle a lawsuit brought by a journalist whose home and office were illegally searched by police. Cops were trying the find the confidential source who leaked the results of an investigation into the death of the city’s former public defender to Bryan Carmody. California’s shield law protects journalists from such searches.

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Brickbat: Expensive Lesson

San Francisco officials have agreed to pay $369,000 to settle a lawsuit brought by a journalist whose home and office were illegally searched by police. Cops were trying the find the confidential source who leaked the results of an investigation into the death of the city’s former public defender to Bryan Carmody. California’s shield law protects journalists from such searches.

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Coronavirus Economics

As the saying goes, “Nothing is certain but death and taxes.” I would add, “and anti-price gouging legislation in times of crisis.” Yet price increases in the face of sudden shortages are an important impetus to restore supply and demand market conditions that are closer to normal.

As many of us have experienced in the past few weeks, buying toilet paper, hand sanitizer, and face masks has become more difficult and more expensive. The reason, of course, is that unusually large numbers of people are rushing to buy these and other products that might prevent the spread of the new coronavirus. It’s normal for people to stock up on supplies during crises. The immediate results are empty store shelves, soon followed by higher prices.

When this happens, politicians around the globe demand an end to the price hikes. The goal is to improve consumer access to the products now in higher demand.

In New Jersey, for instance, at least 10 retailers have received warnings from the government to stop their so-called price gouging. Similarly, the French government announced that it won’t tolerate such price increases and will soon decree a price ceiling on face masks and hand sanitizers. In a move guaranteed to worsen and lengthen the shortages, French officials are even going so far as to appropriate stocks of masks. Just this week, the Department of Justice threatened to act against “bad actors” who raise prices during this time of panic. The list goes on and on.

While well-intentioned, such heavy-handed intervention is a mistake on many levels.

First, the rise in prices conveys nothing more than the unusually intense surge in demand for these products. Consumers value these products more now than they did just a few weeks ago, which is reflected by the higher prices.

But here’s another reality: If prices are kept artificially low, there’s little incentive for shoppers not to buy as much as they can. Of course, only those shoppers lucky enough to get to the stores first can do so. Their hoarding then leaves nothing for shoppers in line behind them.

The fact is there’s no better means of slowing the rising demand—and, especially, reducing excessive hoarding—than allowing the very price hikes that governments are trying to prevent.

But price hikes have another important advantage: They create the necessary incentives for entrepreneurs to shift resources toward activities that increase the supply of these goods.

The higher prices encourage higher levels of production for goods like masks and hand sanitizers, which then increases supply. Even some companies that couldn’t afford to produce these goods in the past will be prompted by high prices to now do so. The Japanese electronics giant Sharp started to use its TV factories to make surgical masks when the domestic supply went dry. Manufacturer FoxConn did the same in China to protect its employees who assemble iPhones.

Government officials (and pundits) never seem to learn (or remember) that in times of crisis, naturally rising prices are necessary to guarantee that goods, services, and inputs are used to maximum social advantage. When governments prevent price hikes, they unwittingly create shortages of vital supplies. Unfortunately, such government intervention makes it harder for people to recover from disasters or, today, to protect themselves from the coronavirus.

Think about it. Without price fluctuations to provide a signal to manufacturers, how will they know by how much or how quickly they need to increase production? If prices are kept artificially low, factory owners have no way to know for sure that actual demand (and not just hoarding) has risen enough to justify a change in their production schedules. Second, if governments keep prices from adjusting upward, the additional demand for masks might not result in enough revenue to cover the extra costs of producing and shipping more masks.

The bottom line is that by keeping prices artificially low, governments around the world encourage artificially high demand, from hoarders, for example. Necessary increases to the supply chain will also be discouraged, which results in unnecessary shortages, long lines of desperate customers, empty shelves, and black markets in dark alleys.

Aren’t we better off when products are actually on the shelves and available for purchase, even if only at higher prices? When no such products are to be found, except by the politically and socially connected, ordinary citizens lose out.

COPYRIGHT 2020 CREATORS.COM

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Coronavirus Economics

As the saying goes, “Nothing is certain but death and taxes.” I would add, “and anti-price gouging legislation in times of crisis.” Yet price increases in the face of sudden shortages are an important impetus to restore supply and demand market conditions that are closer to normal.

As many of us have experienced in the past few weeks, buying toilet paper, hand sanitizer, and face masks has become more difficult and more expensive. The reason, of course, is that unusually large numbers of people are rushing to buy these and other products that might prevent the spread of the new coronavirus. It’s normal for people to stock up on supplies during crises. The immediate results are empty store shelves, soon followed by higher prices.

When this happens, politicians around the globe demand an end to the price hikes. The goal is to improve consumer access to the products now in higher demand.

In New Jersey, for instance, at least 10 retailers have received warnings from the government to stop their so-called price gouging. Similarly, the French government announced that it won’t tolerate such price increases and will soon decree a price ceiling on face masks and hand sanitizers. In a move guaranteed to worsen and lengthen the shortages, French officials are even going so far as to appropriate stocks of masks. Just this week, the Department of Justice threatened to act against “bad actors” who raise prices during this time of panic. The list goes on and on.

While well-intentioned, such heavy-handed intervention is a mistake on many levels.

First, the rise in prices conveys nothing more than the unusually intense surge in demand for these products. Consumers value these products more now than they did just a few weeks ago, which is reflected by the higher prices.

But here’s another reality: If prices are kept artificially low, there’s little incentive for shoppers not to buy as much as they can. Of course, only those shoppers lucky enough to get to the stores first can do so. Their hoarding then leaves nothing for shoppers in line behind them.

The fact is there’s no better means of slowing the rising demand—and, especially, reducing excessive hoarding—than allowing the very price hikes that governments are trying to prevent.

But price hikes have another important advantage: They create the necessary incentives for entrepreneurs to shift resources toward activities that increase the supply of these goods.

The higher prices encourage higher levels of production for goods like masks and hand sanitizers, which then increases supply. Even some companies that couldn’t afford to produce these goods in the past will be prompted by high prices to now do so. The Japanese electronics giant Sharp started to use its TV factories to make surgical masks when the domestic supply went dry. Manufacturer FoxConn did the same in China to protect its employees who assemble iPhones.

Government officials (and pundits) never seem to learn (or remember) that in times of crisis, naturally rising prices are necessary to guarantee that goods, services, and inputs are used to maximum social advantage. When governments prevent price hikes, they unwittingly create shortages of vital supplies. Unfortunately, such government intervention makes it harder for people to recover from disasters or, today, to protect themselves from the coronavirus.

Think about it. Without price fluctuations to provide a signal to manufacturers, how will they know by how much or how quickly they need to increase production? If prices are kept artificially low, factory owners have no way to know for sure that actual demand (and not just hoarding) has risen enough to justify a change in their production schedules. Second, if governments keep prices from adjusting upward, the additional demand for masks might not result in enough revenue to cover the extra costs of producing and shipping more masks.

The bottom line is that by keeping prices artificially low, governments around the world encourage artificially high demand, from hoarders, for example. Necessary increases to the supply chain will also be discouraged, which results in unnecessary shortages, long lines of desperate customers, empty shelves, and black markets in dark alleys.

Aren’t we better off when products are actually on the shelves and available for purchase, even if only at higher prices? When no such products are to be found, except by the politically and socially connected, ordinary citizens lose out.

COPYRIGHT 2020 CREATORS.COM

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