Wednesday, October 30, 2013

Hey, Hey! Ho, Ho! The Cuba Embargo Has Got to Go!

Yesterday, the United Nations General Assembly voted 188-2 urging that United States ends its embargo on Cuba. Although John Kennedy started off the embargo back in 1962, the Cuban Democracy Act, which strengthened the embargo, was signed about twenty years ago. Under normal circumstances, I am disinclined to agree with the United Nations because they have an anti-Israel bias, they have no grasp of human rights, and they are responsible for such scandals as the Food for Oil Programme and UN troops committing sexual assault. Even though I am hardly a fan of the United Nations, I have to agree with the United Nations in this instance because although the embargo might have a nice intention (like most government interventions), the truth of the matter is that liberalized trade works much better than economic sanctions do.

Although Cuba has a while to go in terms of freedom, Raúl Castro has made some marginal improvements in way of economic reforms (see recent end of dual currency), as can be seen by Freedom House and the Heritage Index of Economic Freedom. The United States offered Romania, Czechoslovakia, and Hungary normal trade relations after they started to make marginal reforms back in the 1970s, even in spite of their past human rights violations.

If the embargo has essentially been in effect since 1962 and has done nothing to liberalize Cuba's economy or free its people from Communism, why bother having the embargo? Cuba has not been an economic or militaristic threat for quite some time. All the embargo does is that it turns America into a scapegoat so that Cuba can avoid dealing with its own issues, and the all while, the embargo is pushing Cuba towards nations that are not friendly towards the United States, such as Colombia and Venezuela.

The embargo is simply not a matter of doing nothing to liberalize Cuba. There are also economic effects of the embargo. In 2009, the United States Chamber of Congress and United States International Trade Commissions estimated that the embargo costs United States approximately $1 billion in exports per annum. Although one could argue that the state-owned government would receive a good chunk of the economic benefits, trade would still relieve the Cuban government of dollars more quickly, at which point the United States could reclaim those dollars.

Furthermore, the Unites States does plenty of trade with countries that have egregious human rights records, most notably China, which is one of the United States' largest trading partners. Looking at foreign policy history, the United States has a precedent of supporting authoritarian regimes, including Pinochet's Chile, Iraq, Afghanistan, and Batista's Cuba, the very regime that was so oppressive that it triggered Castro to rise to power. With all the other nations out there with lousy human rights, why is Cuba the one nation singled out with an embargo? Also, if improving upon human rights is a basis for the embargo, doesn't it seem hypocritical for the United States to try to promote democracy while prohibiting travel to Cuba? You know something is off when it is easier for an American to travel to North Korea than it is to travel to Cuba.

The embargo on Cuba is nothing more than a vestige from Cold War-era foreign policy. It has done nothing to alter the path of the Cuban government, and it has not liberated a single Cuban citizen. What the embargo has done is stifle trade and economic progress. Its failure should not be a basis for its supposed eternal necessity. History teaches us that countries have a much better chance to acquire freedom if they are allowed to trade in the global economy. China's Open Door Policy of 1978 is a good example of that. We started trading with China, and before we knew it, China's policies have been heading more so in the right direction over time. Even with uncertainties of Cuba's future, the Cuban nation would have a much better chance of succeeding if the United States removed the embargo than if it continues with this antiquated, failed policy.

12-17-2014 Addendum: Since Obama is considering removing the embargo on Cuba, I figured I should post this piece from Vox on seven reasons why the embargo is bad policy.

Tuesday, October 29, 2013

MoveOn.Org's Shoddy Comparison Between Firearm and Automobile Fatalities

I already know that MoveOn.org is a Left-leaning organization with an axe to grind. Being an interest group comes with more objectivity issues than a think-tank does. So when I read a recently published article from MoveOn.org entitled "Guns Will Be More Dangerous Than Cars By 2015," I was not at all surprised at the argumentum ad metum, as well as playing fast and loose with statistics while using a false analogy.

I like how the author didn't bother to ask the reason behind the trends. Although laws regarding seat belts, drinking and driving, and texting while driving played a role, a lot of the automobile fatality decrease has to do with such technological developments as seat belts, air bags, and crumple zones. Technology improves over time (see the promising development of the self-driving car), which ultimately means fewer fatalities. Unless people choose to intentionally cause death with cars, we will most likely not see a notable increase in automobile fatalities. As I point out below, most firearm deaths are intentional, and not so easily preventable.

It doesn't matter if the automobile fatality rate is comparable to the firearm fatality rate. This apples-to-oranges comparison between firearm and automobile fatalities does not make sense. With few exceptions, auto fatalities are accidental. There are not a whole of intentional automobile deaths (The CDC only reported 38 motor vehicle homicides for 2010 [Table 18]). Look at the CDC data, and you'll see that the vast majority of firearm deaths are intentional. If MoveOn.org wanted an apples-to-apples comparison, it should look at accidental firearm fatalities versus accidental automobile fatalities. Unlike automobile fatalities, most of firearm fatalities are not accidental. Using the same CDC data, most firearm deaths are either suicides (19,392) or homicides (11,078). The number of unintentional firearm deaths? 606. Compare that number to the thirty-thousand-plus unintentional automobile deaths, and we see that automobile accidents cause way many more deaths than firearm accidents.

Even if for whatever reason, you think that looking at accidental deaths is invalid (don't know why, but let's assume), how many guns are there in comparison to automobiles? Although guns are inanimate objects, for argument's sake, let's buy into the notion that "guns kill people." Going with that thought, raw data only tells us so much. For a better comparison between gun and automobile fatalities, the comparison needs to be done per capita. Why? If we are going to say that one car is equivalent to one firearm, thereby making it an "apples-to-apples comparison," then we need to have a comparison of deaths with a 1:1 ratio so we can figure out how many deaths each automobile or firearm causes. There are an estimated 310 million firearms in the country. Compare that to the 254 million automobiles in this country. 310:254 is not a 1:1 ratio, which is why we need the adjustment. If we weigh the automobile deaths so that the comparison is per capita (i.e., [310/254]*33,000 automobile deaths), as opposed to with raw data, what we find is that with adjusting the numbers based on a 1:1 ratio, automobiles kill at a higher rate than firearms do.

Another issue with using raw data like this, especially with a twenty-plus year time span, is that the population has increased. The author failed to adjust for population growth, which is why it is preferable to use fatality rates, much like I did in the previous paragraph. Using rates is important because it makes this adjustment. As I pointed out during the Aurora shooting about a year and a half ago, the firearm homicide rate has been declining for quite some time.

Between the MoveOn author's misuse of statistics, usage of the recent school shooting in Nevada to scare people, and a usage of an irrelevant comparison between firearms and automobiles, the author's recommendation is that there "should be at least as many safety regulations for owning and operating a gun as there are for doing the same with a car." I wish the author used the same 1:1 ratio when actually looking at the fatality statistics, but I guess it's easier to mislead people who a priori believe that gun violence is on the rise. How the author compares an accidental cause of death to an intentional one and then attempts to justify further regulation of the latter on the same grounds is beyond me. I am all for having an intellectual debate on the merits of gun control, but please, let's put everything into perspective first so we can determine the extent of the problem.

Sunday, October 27, 2013

Pirkei Avot 2:4: Submission?! Is That Even a Jewish Value?

The word Islam (اسلام) comes from the same root as the Arabic verb "to submit" (يسلَم). In Christianity, one of the tenets is to submit oneself to Jesus. Based on a passage of Pirke Avot I just studied with my dear friend and chevruta, Judaism claims to have something similar in way of submission. Here's an English translation of Pirke Avot 2:4:

He [Rabban Gamliel] said, "Treat His will as if it were your own will, so that He will treat your will as if it were His will. Nullify your will in the face of His will so that He will nullify the will of others in the face of your will."

I do not have a part with the first problem of this statement. Much like one would not scrimp on a huge investment such as a house, one does not settle for less on one's own spiritual life (Ruach Chaim). One is to treat their relationship with G-d that is as intimate as the ideal marriage. It's like any covenantal relationship: a marriage is about harmony in the home (שלום בבית) and understanding the other partner to the point where one compromises where needed. Like any other relationship, it is a two-way street.

Once I came across the second portion that talked about nullifying one's will, that is when I found it to be very problematic. The verb בטל is used in the passage as "to nullify," in the sense of "to cease" or "to abolish." According to the Kozhnitzer Rebbe, there are times that we should pray to G-d to take away our free will. Unfortunately, there are many Orthodox Jews that feel this level of unquestioning obeisance.

I know it's easier to succumb to groupthink or conform to an establishment than it is to have an authentically independent mind, but how can a Jew think that submission is a Jewish value? The name of the Jewish people is ישראל (Israel), which literally means "[He who] struggle[s] with G-d." Asking a Jew to nullify the very thing that provides the namesake of what it means to be Jewish is asinine. Essentially, if you're not struggling with or questioning your Judaism, you're not doing it right. This is especially true when we consider that the last time G-d explicitly said anything in prophecy was well over a millennium ago. Even with that in mind, all of this assumes that the tradition has been transmitted absolutely perfectly, the rabbis have correctly understood G-d's will 100% throughout history, and also assumes that the halachic system doesn't have any glitches. I cannot make any of these assumptions without having some reservations, hesitations, or doubts on my end. As a result of the skepticism and struggling with G-d, Judaism becomes a modus operandi that allows me to ask the bigger questions of life and analyze my beliefs and practices on a regular basis and on a more profound level.

If G-d wanted to make us as angels, trust me, He could have and He would have. But G-d endowed us with free will. He endowed us with the ability to question. Think about the Passover seder: the child who cannot even ask a question is lower on the totem pole than the evil child (*gasp*). Abraham questioned G-d before He destroyed Sodom and Gommorah. Moses questioned G-d by reminding G-d about His promise to the Jewish people (Exodus 32), after which G-d subsequently "changed his mind." These are but some of the examples in which Judaism illustrates its famous reputation for permitting one to ask a good question and not live in spiritual passivity and complacency.

Pirke Avot is a text of ethical ideals, but the problem with setting such high standards is that being human means making mistakes and being unmistakably imperfect. As laudable as it might seem to eliminate all our flaws to the point of nullification, it is just not possible. It is a verse such as this one that engenders the all-or-nothing mentality that permeates throughout much of Orthodox Judaism. I am all for Jews studying Torah and performing mitzvahs as much as humanly possible, but let's do so with an appreciation and understanding of the human condition.

Thursday, October 24, 2013

Chain of Fools: Finding Better Solutions to the Agunah Crisis Than Violence

I was shocked when an Orthodox friend of mine informed me of how the FBI recently raided a Monsey yeshiva in a divorce-gang probe. Under Jewish divorce law, men are required to provide the wife with an official writ of divorce known as a get (גט) as a prerequisite to process a divorce (Deuteronomy 24:1-2). If a wife wants a divorce and the husband refuses to present the wife with the get on his own free will (Yevamot 14:1), the wife is considered עגונה (agunah; literally meaning "chained" or "anchored"), and cannot get divorced. In the aforementioned raid, the two rabbis that were arrested orchestrated the kidnapping and torture of husbands that refused to provide their wives with a get. The rabbis also charged the wives exorbitant fees for the services rendered. Extorting vulnerable women and torturing recalcitrant husbands is at the very least a violation of the spirit of halacha, if not a downright violation of the letter of the law. Both as a libertarian and as a Jew, I condemn such unethical behavior. Even if I decidedly disapprove of the methods involved, I have to recognize that Jewish divorce law could use some reform.

Some additional background before continuing: Although the agunah status applies to a wife whose husband refuses to provide a get, there are also other instances in which this status is applied, including when a husband left on a journey and did not return or when a husband goes to battle and is missing in action. In days of yore, it was common for a husband to get lost on a journey or to become MIA. Nowadays, the most common occurrence of agunah is when a husband refuses to provide the wife with a get

What was supposed to protect women is now being used to subject women to humiliation and debasement. The laws behind agunah put women at a distinct disadvantage, especially since only the woman can be declared an agunah. If a woman does not obtain a get and has sexual relations with another man, she is labeled as an adulteress (Exodus 20:13, Deuteronomy 5:17), and the children from that consummation are labeled as ממזרים (commonly translated as "bastards"). If the husband wants a divorce but the wife refuses, the husband can take a second wife (היתר מאה רבנים). The wife does not have the luxury of taking on a second husband in the interim as a form of recourse. Additionally, the husband can delay the divorce proceedings out of spite or for reasons of extortion for as long as he wants. The wife has no way to protest. Not even the beit din can really interfere. The power to grant a divorce is, by and large, at the husband's discretion. 

Something needs to be done to remedy this imbalance of power and injustice. Under the current halacha, the wife has limited contexts in which she can initiate the divorce, such as the refusal of financially supporting one's wife (Ketubot 47b-48a), a husband refusing to have sexual relations with one's wife (Ketubot 63a), the fact that the marriage was done under duress (Kiddushin 2b; Bava Batra 48b), annulment based on technical, legal defects of the marriage itself (which is rare), or the case of the "repulsive husband" (Mishneh Torah, Hilchot Ishut 14:8), but even then, the halachic applications are very limited, not to mention that the high burden of proof in those scenarios is squarely on the wife. Instances of domestic abuse or the husband committing adultery are not even automatic grounds for a divorce in Jewish law! For a religion whose claim is that we are all created in His image, regardless of gender, this level of disenfranchisement needs to stop. What can be done to stop it?   

Looking at the options, the best option lies within the universal dissemination of adding a prenup within the marriage license, or at least having a separate document with a prenuptial agreement. The thing that annoys me here about this recommendation is that I am hardly being original. The Conservative movement beat Orthodoxy to the punch back in the 1950s with the Lieberman clause, which is a legal fiction within the ketubah (כתובה) that gives the beit din permission to adjudicate in the divorce proceedings in the event they arise. The Lieberman clause was accepted by R. Joseph Soloveitchik. However, the ultra-Orthodox played politics and quashed any attempts of cooperation between the Conservative and Orthodox movements. 40 years later, R. Mordechai Willig was the first rabbi to draft what is known as the "Halachic Prenup." It has been nearly 20 years since R. Willig drafted that prenup, and yet, agunah is still a major issue.

Agunah is a case study that reminds me what can be infuriating about Orthodox Judaism. Here you have a clearly identifiable problem that you have had at least for decades. You then decide to play interdenominational politics for forty years before coming up with a decision that is virtually identical to that of the Conservative moment (except for the fact that in the Orthodox version of the prenup, the prenup is its own document, and the document signing is monitored under Orthodox auspices). Even after the creation of the "Halachic Prenup" back in 1994, this perfectly halachic solution has yet to be implemented on a large enough scale. Why? The Orthodox establishment prefers the status quo for its own sake over helping to engender legitimate divorce law reform because "G-d forbid if the system is flawed and needs some repair." The Orthodox movement moves so slowly on such issues that snails and sloths could a thing or two from Orthodox Judaism.

The rabbis can implement the takkanah (rabbinic enactment) of a prenuptial agreement to overcome the flaw. Hillel did something similar when he created the prozbul to bypass the laws of loan forgiveness. Looking at the issue, the opposition is not based on halacha, in spite of whatever façade to the contrary is put up; it's about a socio-religious ploy and a general inability of Orthodoxy to deal with their aversion to legitimate change. Halacha is supposed to be a modus operandi in which Jewish values are supposed to be epitomized. The only value being illustrated by maintaining the status quo and preserving this antiquated law is that it is acceptable for women to become collateral damage.       

The mere creation of a halachic prenuptial agreement is insufficient because it needs to be implemented. Both congregants and rabbis need to put pressure on others to make sure every married couple has a prenuptial agreement, which is not easy to enact because, as the counterargument goes, the parties involved should be more focused on lifelong commitment and less on divorce. Even if every subsequent marriage agreement were accompanied by a prenup, it still does not solve the issue of current marriages that lack such an arrangement. It's important to provide women with counseling to get through the ordeal. There are also the possibilities of a conditional marriage, which would be a stipulation within the marriage ceremony that states that in the event of divorce, no get is required. There is also the idea of a provisional get, even post facto, in which a certain set of circumstances would trigger the husband presenting the get to his wife.  I would suggest that the wife be allowed to present a get or the beit din (or even secular authorities) be permitted to intervene to compel the divorce in the event that the married couple did not make the arrangement ab initio, but I know that will not happen because those solutions would be labeled as "halachically unacceptable."

One thing for sure here is that the agunah problem has been all too prolonged. The status quo is unacceptable, and using unsavory methods to coerce divorces also shows how broken Jewish divorce law is. Jews need to be appropriately educated on the issue, and also need to be willing to do whatever is in one's sphere of influence to remedy the situation. Otherwise, it reaffirms the misconceived notion that Judaism does not grant women the dignity and respect they deserve.

Monday, October 21, 2013

Is It In Our Interest to Break Up Big Banks? Why the Notion of "Too Big to Fail" Is Too Damaging

The systemic nature of the Great Recession has made it the worst economic downturn since the Great Depression. The causal mechanisms of the recession are multifaceted and more interconnected than I care for. The government-sponsored entities known as Fannie and Freddie, regulations from the Department of Housing and Urban Development (HUD), as well as the Community Reinvestment Act of 1995, exerted pressure on banks to make taking out a housing loan much easier for low-income and middle-class families, which artificially increased the demand for home ownership. Aside from predatory lending, banks used securitization to re-package different combinations of credit-quality mortgages to better hide and evade the costs of subprime loans. Structured investment vehicles made it difficult for credit risk agencies to accurately rate loans. The Federal Reserve kept the federal funds rate low, which is problematic because artificially low interest rates come with adverse consequences, including excessive borrowing and risk-taking. In addition to an increasingly materialistic society, consumers thought that they could borrow at such low rates without consequences, and thus racked up a ton of consumer debt (see consumer debt to GDP ratio). To summarize the South Park episode Margaritaville, "there is plenty of blame to go around."

Since the Great Recession, there has been a call for dealing with banks that are "too big to fail (TBTF)." Many would like to see these big banks broken up into smaller banks so that we can avoid another calamity like the Great Recession. I'm no fan of Big Banks getting into bed with Big Government and receiving special treatment and favors, but is breaking up big banks the proper move?

What makes a bank too big to fail? We do not know if the banking system would have come apart had we not bailed out the banks under the Troubled Assets Relief Program (TARP). The idea of TBTF might be a plausible theory, but it's still only a theory that has yet to be substantiated. What makes a bank TBTF is based on what regulators believe to be too big, which in the case of Dodd-Frank, is $50B in assets. By that regulation, the Federal Reserve is too big to fail. Given that the GDP is over $15T, I highly doubt that a bank with $50B would bring a collapse of the financial system, especially since the banking system make up a smaller portion of the GDP than other developed nations. Plus, how does one determine whether a bank will be TBTF down the road? What size does a bank need to be for a regulatory institution not to meddle?

I have to wonder if anyone thought of the implications of actually breaking up a big bank. Trillions of dollars pass through the global markets each day. If one breaks the larger banks up, would a smaller bank be able to efficiently handle all of those transactions? Operations simply would not be the same. What would happen to the risk-managment systems that deal with interest rate swaps or currency swaps? They would be diminished. Also, downsizing banks would affect downsizing operations, which means it would affect the one million-plus jobs in banking, and this does not even get into hypothetical transition costs.

If a bank is TBTF, there is a good chance that a bank is also too big to properly regulate. The government's legislative response was to pass Dodd-Frank, which was a bill of over 800 pages and came with 13,000 pages of regulations. This regulatory overhaul puts smaller banks at a competitive disadvantage because they do not have the same resources to ensure compliance with the regulations. Breaking up the banks would put the banking industry at an even larger disadvantage because none of the banks could handle the regulatory overload.

The consumer would also feel the cost of breaking up big banks because of the economic advantage of larger banks. The joy of larger banks is that they use the economies of scale by spreading the costs of infrastructure, technology, and other capital investments diffusely over a larger base, which means these banks can cut the cost of banking, as well as expand the scope of services rendered. Breaking up the banks would sacrifice valuable efficiencies by limiting the extent of the bank's services while increasing costs.  

The notion of TBTF only perpetuates the bailout mentality that creates moral hazard (see here and here) and a contagion effect. Reducing bank size does not solve the issue, as someone as Paul Krugman points out. Smaller banks have failed in the past, as we saw both in the Great Recession, Great Depression, and the Savings and Loan Crisis. Just look at MF Global, Bear Stearns, or Knight Capital.  What matters is the interconnectedness that financial institutions experience, regardless of a financial institution's size. The collusion between Big Banking and Big Government needs to stop, that much is for certain. But what can be done to help prevent the past from repeating itself? Bankruptcy laws (or even laws governing shadow banking) can be reformed, e.g., "living wills," to make sure that these firms can fail without causing breakdown of the economy. Alternatively, we can implement stricter capital requirements, higher reserve requirements, or we can even implement a contingent convertible debt requirement. However, to say that we need to break up big banks, especially without knowing what breaking up banks would trigger or even define how big a bank should be, is not a solution. In short, we need to abandon the idea of "too big to fail."

Friday, October 18, 2013

Parsha Vayera: Why Peace Trumps the "Honest Truth"

It's nice to see that those in the Torah at least can have a good laugh, which is exactly what Sarah did (Genesis 18:12). At this point, Sarah was already 90 years old, and Abraham was 100 years old. When she was told that she would bear a child, she couldn't help but chuckle. To paraphrase what she said to G-d, "I'm too old to have a child, and so is Abraham (ibid)." Although Sarah "laughed within herself," Abraham managed to hear Sarah laughing. Abraham inquired, and G-d told him that Sarah thinks that she is too old (ibid 18:13). Notice that G-d left out the part where Sarah said that Abraham is too old. Don't worry, the Talmudic rabbis picked up on this as well, which is why what they concluded from this passage is that one can deviate from the truth for the sake of peace (Yevamot 65b).

Why does G-d opt not to relay Sarah's message exactly as she said it? What is G-d trying to teach us here? 

Judaism has a great level of respect for the truth. Lying lips are anathema to G-d (Proverbs 12:22). Pirkei Avot (1:18) teaches us that truth is one of the three pillars upon which the world endures. There has to be something markedly potent to override something such as truth. 

I'm sure you have met at least one person who likes to "be brutally honest." They are the type that like to "tell it like it is." Regardless of their level of intelligence, what these sort of people forget is not only that to be human is to err, but also that our perceptions, biases, and experiences are more than capable of obfuscating an objective view, and it takes a lot to overcome that. It is a self-confidence that crosses the line and turns itself into arrogance. Most of us don't consistently do this to the point where it makes me wonder about whether the individual has a superiority complex. But L-rd knows that just about all of us have had that moment where we feel the need to be brutally honest, even if it's necessarily not to stroke one's ego. That is the type of moment Sarah was having here. 

Sarah had the right to be frustrated, and this excludes what she went through on Abraham's adventures throughout the Genesis narrative. She really wanted to have children. Abraham had to have a child with their handmaid, Hagar, because her childbearing prospectives seemed that hopeless. Plus, they weren't getting any younger. Let's be mature here for a second. Sarah was well past menopause. Without the miracle worker known as Viagra, Abraham could have either been suffering from erectile dysfunction or shooting blanks at this point. In this case, it's not as if Sarah's laugh was a baseless act. There was some pent-up anger, hope, and frustration all bottled up there, and a good laugh seemed to be the way to go, even if the news of a child was in complete disbelief. 

Maybe Sarah was perfectly justified in her reaction. She certainly had reason for skepticism. Even so, G-d decided not to relay the message verbatim. Honesty is not an absolute value in Judaism, and we see that in the halacha. Even if a bride is absolutely hideous, you are to tell her on her wedding day that she looks beautiful (Ketubot 17a). If you're eating at someone else's house and the food does not taste good, you are permitted to lie and say the food tastes good (Eruvin 53b). If people are in the middle of a conflict, you are permitted to lie and tell the parties that the other party holds them in high regard and that they wish to make peace, provided that you have basis to believe that this will actually work (Yevamot 65b). In Pirkei Avot 1:12, Hillel said that one should be a disciple of Aaron by loving and pursuing peace. According to Rashi's and Bertinoro's commentary on the passage, Aaron was such a pursuer of peace that he lied to accomplish it. Within this commentary, there is a parable of a quarrel between a husband and a wife. A man told his wife that is was forbidden to have marital relations with him until he spit in the eyes of the Kohen Gadol (High Priest). Aaron talked with the wife and said that his eyes hurt and her saliva was the cure, thereby resolving the marital dispute. Aaron believed in pursuing peace so much that he allowed himself to be insulted and degraded in the process, which would explain with R. Isaac Alfasi concluded that telling a white lie for the sake of peace was a mitzvah!

An omission of truth or a half-truth should be told before a downright lie, and we should recognize these moments as exigent circumstances, not as a norm to permit lying in all cases. Even so, we better understand why Maimonides said (Misheneh Torah, Hilchot De'ot, 5:7) that one does not "alter the truth in speech, not adding or subtracting, except in interests of peace and the like," and why the Chofetz Chayim permitted the telling of a lie because of peace (Laws of Rechilut, 1:8). 

Judaism is not about truth for truth's sake, particularly when it is at the expense of another's dignity, and it's not about "following the halacha for halacha's sake." Halacha is supposed to spark something within us. It is supposed to make us into better human beings and help the world be a better place than we left it. The words we use are vital tools in that pursuit. Our ability to use words is one of the features that distinguishes us from animals. If serving G-d means that you have next to no regard for human dignity or how one's words will affect another, even if you're "being brutally honest," then you do not understand what it truly means to serve G-d. We can choose words to knock people down or lift people up. Jewish tradition decidedly teaches us to pursue peace by using our words to repair damage that has already been done, lift people up, and help the world realize the significance of properly treating people that are created in His Image.

Thursday, October 17, 2013

Is Online Learning a Viable Alternative to the Traditional Four-Year College Experience?

The cost of a four-year education has outpaced regular inflation by a considerable amount. Student loan debt is causing further financial constraints for recent graduates, and keeping the interest rates on federal student loans only exacerbates the problem. These rising costs beg for higher education reform. In spite of artificially low interest rates and the societal expectation that everyone who graduates high school should immediately enter college and get their four-year degree, there is one phenomenon that neither the government nor society have been able to stop: the rise in online learning. The prospective of more predominant online learning has its allure, and I'm all for providing alternatives to the four-year college to provide better competition in the marketplace. However, the question remains: Is online learning really the way to go in our digital age or is there something qualitatively different about the traditional classroom framework that an online class cannot replace?

Online learning provides a fair amount of advantages, the foremost of which is cost. The development of online learning has been a technological improvement that has increased the supply curve of higher education because overall cheaper technology inputs are being substituted for more expensive labor and capital inputs, not to mention it utilizes the economies of scale to make it cheaper for each marginal unit. Online learning does not have to deal with the same facility, maintenance, and utility costs. Another advantage offered by online learning is the flexibility in time. Students who decide to work in the daytime so they can finance their education, live at home, or still maintain their familial obligations, can do so by deciding to take their classes either in the evening or during the weekend. Very rarely, if ever, will you find a teacher to offer such flexibility in when they teach or hold office hours. Essentially, it is costly to coordinate students and teachers.

Students also have the convenience of learning right from home. No need to commute to class (or potentially no need to relocate oneself to campus), which saves time and money. There are also time savings in terms of the online courses not being repetitive. How so? If a student doesn't understand something in a traditional classroom setting, the teacher has to repeat it, which is a waste of time for those who understood the concept the first time. If a student doesn't understand something on an online course, the student can replay the section, which is a method to help students learn at their own pace.

Much like anything else, online learning does have its downsides. One is a lack of social interaction (although a counter-argument can be made about the quality of interaction of online learning). Classroom learning provides a face-to-face interaction you cannot get with a computer. Plus, why do we want people spending even more time in front of a screen? It seems like intuitive thinking because it's easier for a teacher to pick up non-verbal cues that show frustration or boredom. However, the Department of Education published a meta-analysis in 2009, in which it found that those who performed in online courses fared moderately better than those in traditional classes (see Abstract) and provides a more conducive learning environment (DoE, xviii). As a side-note, I enjoyed this analogy between movie and stage actors with regards to the quality of online learning.

There is also the issue of the digital divide, i.e., Internet accessibility. There are people who do not use the Internet, and their reasons vary. With the overall decreasing prices of computers and the increasing prices of college tuition, I wonder which is less burdensome for low-income and rural students. There are also costs of online learning, which include the costs of migrating the teaching to the online venue, design and implementation costs, as well as maintenance costs. A lot of these costs are upfront, and short of performing a cost-benefit analysis, I will surmise that in the long-run, it will end up being cheaper than maintaining the traditional system.  

As nice as the advantages of online learning are, technology has its limitations, and I don't solely mean that if equipment broke down or if the Internet connection is not working. If I had to make a prediction, online courses will complement the college experience to provide the consumer with more options, not completely replace the traditional brick-and-mortar university. It will most likely replace those lecture-style courses (e.g., introductory courses) that have a large enough of a class size in which engagement and attention spans are already problematic, which covers a sizable amount of undergraduate classes.

I was fortunate enough to attend a university where the average class size was twelve students, and there was a lot of social interaction between the professor and the students. For courses that are discussion-style and more interactive, such as the ones at my undergraduate alma mater, the social interaction argument is much stronger because the face-to-face interaction in a class that facilitates discussion is much more effective learning method. Especially in more advanced courses, there is more required than the straight-forward delivery of knowledge. Online courses also cannot replace courses, that require work in a laboratory, e.g., natural sciences, engineering. Even courses in visual sports, dance, art, or music require the usage of facilities, and online learning cannot find away around that. And don't forget the communication-based learning of foreign languages that could theoretically be replaced by online learning, but would qualitatively suffer.

In spite of these limitations, online learning should be implemented where applicable so that we can drive down tuition costs and save time while using 21st century methods to provide the best college education possible.

Monday, October 14, 2013

Why More Privatization of National Parks Would Hardly Be Unbearable

One of the problems with the pervasiveness of Big Government and more centralized government is when a government shutdown occurs. When the government predominantly or exclusively gets its hands on certain aspects of our lives, certain goods and services are temporarily out of reach during a shutdown, and as a result, casualties ensue while politicians are playing games. One of those causalities is the closing of national parks. Even if some of the parks are in the process of re-opening, national parks should not be held hostage while politicians in the Beltway are putzing around during debt-ceiling or other budgetary fights. After all, isn't public land supposed to be public? If public land is supposed to be both non-excludable and non-rival (at least in theory), why can't people have access to national parks during a government shutdown? Isn't there something that can be done so we can prevent this, or a similar government prohibition of entering public land, in the future?

Well, yes. It's called greater privatization and marketization. The justification for having public land for national parks in the first place is the idea that the markets are not going to protect national parks and the beautiful scenery that accompanies the land. If markets do not have an incentive to protect the pristine of Mother Nature, then the government should. Or so goes the argument. First of all, who do you think is more myopic and will thus be more prone to letting facilities become run down: the politician who typically gets re-elected every two or four years, or the businessman who is looking to stay in business for more than a few years? Second, there are more than 280 million visitors every year. There is evidently a demand for national parks, even if that demand has been distorted by the government. It's hard to have an actual market when government regulates it so heavily. Third, there is less labor rigidity (e.g., 80% of the public agencies' costs are tied up in labor costs) in the private market than there would be for the government bureaucracy, which is to say that the private sector can utilize a work force for less money and more effectively. This also means that if the private management company experiences a budget contraction, they have more flexibility to adapt and cut costs where need be. Since parks are a lower priority in government budgets, they are more prone to shutdowns and massive spending cuts when the government experiences a contracting budget. Fourth, the private sector already has a precedent of managing land, whether that is more indirectly in terms of beaches or country clubs or golf courses, or more directly with many parks, including Disney's Animal Kingdom (yes, they are accredited), Bryant and Central Parks in NYC, or the Fraser River Basin in Canada.

Out of an understanding of political feasibility, national parks will not become completely privatized anytime soon. Even so, I would recommend a step that gradually brings us closer to privatization, which means a public-private partnership that puts a large amount of emphasis on the more privatized aspect of the merger. How would we go about such a merger?

The federal government would lease the land to private land managers in which one of the more predominant conditions of the lease would be to "conserve and preserve the land or lose the lease." Alternatively, one can opt for a conservation easement. In this arrangement, the land would still be public and there would be some government oversight and regulation. However, the management and upkeep of the land would be relegated to the private sector. After a predetermined amount of time, the agency doing oversight can inspect the quality of the private land manager and determine whether they merit a contract renewal.

In case the profit incentive to upkeep the pristine landscape isn't enough for conservationists, another provision in the lease can be to donate a certain percent of profits (within reason, to be sure) to wildlife funds to help further wildlife preservation. This is not ideal, and I don't necessarily recommend this as a provision because private businesses should be allowed to use their profits in whichever way they choose, but I just throw it out there as an option.

We should also give the private managers leeway in terms of charing their own user fees that better reflect market prices. The government currently enacts a price ceiling on national park fees to keep them artificially low. Knowing how well government-enacted price ceilings work (e.g., rent control, human organ market, anti-price gouging laws), I'd rather have slightly higher prices in user fees that are more diffuse in nature than have land overuse that results in congestion and more rundown facilities.

What the private-public partnership does is two-fold. One, it conserves the land so visitors can have an unspoiled view of nature, which is the role of keeping the land public. The second is to use market mechanisms, mainly using incentive to keep costs low, improve on the overall infrastructure, and be more generally responsive to change than a bureaucracy, to not only help the parks generate more profits, but also to improve on the overall quality of the parks. By operating our national parks under this framework, we can enjoy the beauty of nature for many more generations without succumbing to political pressures or economic inefficiencies.

Friday, October 11, 2013

Parsha Lech Lecha: Leaving Home, Leaving Your Comfort Zone

At age 75, the Torah records G-d's first interaction with Abraham (formally known as Abram), which was G-d giving Abraham a commandment (Genesis 12:1): לך לך (lech lecha). This commandment was the beginning of Abraham's Ten Trials. Why was it a test for Abraham to "go forth from his native land, from his birthplace, and from his father's house to the land that G-d was to give him?" What made leaving so difficult and arduous?

To answer this question, we should answer another question: Why does the verse say לך לך? It would have been sufficient to say "go" (לך). The second "לך" is seemingly superfluous. Why say לך לך? According to Rashi, G-d said לך לך because that second לך meant "for your benefit." Rashi opined that the benefit was so that Abraham could become rewarded and become a great nation. Not that I disagree with Rashi, but I think there is something more taking place.

The phrase לך לך is used in one other place in the Torah: right before Abraham's Tenth Trial, the one where Abraham is supposed to sacrifice his son (Genesis 22:2).  Both passages also have a threefold description that follows לך לך, both passages conclude with similar blessings, and both passages act as brackets for Abraham's narrative, which is to say that there is a connection. Both the first and last of Abraham's trials were arguably his most difficult trials. If we are to take Rashi's interpretation and apply it to both trials, then I can infer that there was to be some sort of benefit from the trial, but what is the benefit?

If the test were truly a benefit, I have to wonder what the test is in the first place. One can argue that leaving one's homeland, community, and family is difficult. If the verse were to only convey that leaving a place to which one is accustomed is strenuous, the verse would have said that Abraham was to leave "from the home of your father, from your birthplace, from your country," not the other way around. The Malbim picked up on the reverse word order, and he concluded that the order is "in reverse" is because the behaviors most heavily ingrained within us take place in the home.  

לך לך is not leaving a physical place, but rather one in which you are to "go to yourself," i.e., go to your true self [by serving G-d] (Lubavitcher Rebbe). Going off the Lubavitcher Rebbe's interpretation, לך לך is not a physical departure, but a spiritual one. Since the Torah is oddly silent about Abraham's life prior to this moment, we have to use other texts to fill in the blanks. Midrashic tradition teaches us that Abraham was surrounded by idolatry (Mirdrash Rabbah, Genesis 38:13).    

The first step is always the most difficult to take. Even if Abraham intellectually realized that monotheism is correct during his time in Haran, he just couldn't pick up and leave because understanding something from an intellectual standpoint and internalizing it are not the same thing. Introspection and reflection take time. He had to detach himself emotionally from his family and native land first. It takes time to realize what your purpose in life is and who you are meant to be, and that process does not get any easier with age. To leave family, friends, and community, essentially, everything Abraham knew for some unknown land and a newly found religion. He essentially had to become non-conformist. This first step not only takes a good amount of faith in G-d, but it also requires a huge step out of one's comfort zone, which I would argue was Abraham's first test.

As scary as the unknown can be, it is also exhilarating. To paraphrase the Blues Brothers, Abraham was on a mission from G-d. By leaving home, Abraham not only became the patriarch of Judaism, but he established ethical monotheism in this world. Abraham was a man who was so great that he walked in front of G-d. He became Judaism's archetype of חסד (loving-kindness). Abraham realized that change is neither good nor bad, but what you make of it. Upon realizing that, he stepped well outside his comfort zone and took those first steps, and as a result, he became a better human being.

Wednesday, October 9, 2013

Simply Amazing How the Ethanol Mandate Fails

Even if oil has not reached its peak, it still is a non-renewable resource, its production and consumption still causes pollution, and both drilling and transporting have created environmental hazards. Oil clearly has its downsides. America should look into alternative energy sources. One of those alternatives is ethanol fuel. Whether one is Democrat or Republican, fighting global warming or Islamic terrorism [with increased energy dependence], ethanol is a politically popular policy. I personally do not care whether ethanol is politically popular. I pondered on the topic of the government getting involved with ethanol a while back, but I would like to take a closer look as to whether the if the validity of the ethanol mandate has a kernel of truth to it, or if it is a poor enough of a policy where it should just be shucked.

If ethanol production had any merit, no government intervention would be required because the private sector would have already invested in it. Up until 2012, the government had been directly subsidizing corn in the amount of $6B per annum. The ethanol proponents allowed the tax credit and the ethanol subsidies to expire back in 2012 without a real fight. The reason? There was still an ethanol mandate in play. According the EPA's Renewable Fuel Standards (RFS), there has to be a certain amount of renewable fuel to be blended into gasoline. Whether it is an ethanol subsidy or a mandate, it is frustrating because both essentially have the same economic effect, which is the artificial increase of demand. An increase of demand means an increase of prices in corn (See the CBO reportWorld Bank report [p. 17]). Since fructose corn syrup is in so many foods, this policy translates into increased food prices. Ditto for any foods that use corn feed during production!

Attempting to increase corn production in the attempts to make ethanol a viable replacement for petroleum is futile. Even if we use every last bushel of corn towards ethanol fuel, it would still only satisfy 12% of America's fuel demand. This certainly refutes the "we would spend less on oil and more on ethanol, which would stick it to Islamic terrorists" argument. This also refutes the "energy independence" argument because the petroleum market is a global market, which means that energy independence has, at best, a negligible effect on petroleum prices.

An increase in corn demand also creates the "food versus fuel" dilemma. The United States produces 40% of the world's corn. 40% of the US' corn production is used for ethanol, which means that 16% of the world's corn supply is used on ethanol production. All of that corn for a little over 1% of energy consumption! The amount of corn used for a gallon of ethanol can feed a person for an entire day. This policy is causing some serious food shortage issues (Santa-Barbara, 2007). Imagine what 16% of the world's corn supply could do to feed those who are starving, whether they live here in the United States or abroad (NIH report). What would be a better usage of about a sixth of the world's corn production: supplying a small amount of fuel inefficiently or feeding millions? You know the problem is getting bad when the United Nations asked the United States to curtail ethanol production last year.

And all of this without even considering that the cost to produce ethanol is greater than the benefit, ethanol only has 73-83% of the efficiency of a gallon of gasoline, the EPA's unrealistic quota for cellulosic ethanol, or the fact that land-use conversion, usage of pesticides, as well as the fossil fuels used for production make ethanol quite the carbon-intensive endeavor. The winners of this policy are corn producers, ethanol producers, and bioengineering companies. The losers? Everyone else. Sometimes, more complex policy is required to resolve a policy problem, but in this case, it's really simple: repeal the mandate.


2-11-2016 Addendum: The National Bureau of Economic Research recently released a paper on who benefits from ethanol subsidies. Two thirds of the benefits went to ethanol producers, and the remaining third went to the blenders. A negligible amount went to the corn farmers.

Tuesday, October 8, 2013

Unemployment Benefits Decrease Poverty? Really?!

With the possible exception of the Pew Research Center, I would opine that any think-tank has its Weltanschauung, even my most favorite think-tank, the Cato Institute. Worldviews notwithstanding, I still expect a think-tank to maintain as much objectivity as possible, regardless of its leanings. I was under the impression that the Center of American Progress (CAP) was the Left's equivalent of the Heritage Foundation, and that CAP would be the only think-tank to lean that far to the Left. In spite of leaning to the Left, I thought that a think-tank such as the Center on Budget and Policy Priorities (CBPP) was still respectable as think-tank. But then I read an article of theirs postulating that a key reason why poverty has not declined is because the government has not pumped enough money into unemployment insurance (UI), and I had to reconsider.

If CBPP is correct in its assertion, at the very least, there should be a high correlation between poverty rates and money spent on unemployment benefits [per recipient]. This means that X leads to Y, i.e., increasing spending on UI leads to lower poverty rates. Whether it is with something like crime or poverty, I have a problem when people say that X is [one of] the [primary] causes of Y because the world is usually much more complex than that. Their assertion should be easy to [dis]prove. First, aggregate the data on money spent on unemployment insurance, which is courtesy of the Department of Labor. Then, aggregate the data on poverty rates (Census) and synthesize the data to run a regression analysis. Unfortunately, due to the government shutdown, I was unable to retrieve the poverty rate data. The link should work when the tomfoolery in DC is over, but in the interim, I have to show graphs illustrating the trends of both spending on unemployment benefits and poverty rates. (I may or may not run the bivariate regression once the shutdown is over). I created the first graph since the Department of Labor's graph was not as illustrative (FYI: The first graph is in real 2013 dollars). The second graph comes from the UC-Davis Center of Poverty Research, whose graph is based on data from the US Census. 





When comparing the poverty rate trend with the outlays in unemployment benefits, I am looking at these trends and I am not seeing anything remotely resembling causation. Now why would that be? Given the interconnectedness of economic activity, you would think that factors such as supply and demand, technology and innovation that typically lower prices, rates of taxation, the number of burdensome regulations, monetary policy, or larger forms of fiscal policy would be better explanations for the poverty rate. But no, the CBPP wants to cling on to the notion that unemployment benefits are so pivotal that if we eliminated unemployment insurance right this second, we would most likely have a double-dip recession. 

Much like with food stamps, one would have a much stronger argument if unemployment insurance were used for temporary financial relief, as opposed to long-term poverty relief. For one, if the job market truly worked where the government could just print money and send people a paycheck, why not do so as a long-term stimulus? That way, no one would have to work ever again. The downside to that is that is not how the world of economics works. 

I also brought this up last year during my kvetch about unemployment benefits, but one of the primary functions of unemployment insurance is that it is essentially a subsidy for unemployment. As the Federal Reserve of Chicago (Mazumder, 2011), Federal Reserve Bank of San Francisco (Valletta and Kuang, 2010), Federal Reserve Bank of Philadelphia (Hagedorn et al, 2013, which goes into detail as to how the unprecedented length of unemployment insurance has caused much of the uptick in the unemployment during the Great Recession), and other economists (Rothstein, 2011; Zandi, 2012) all point out, how can you expect there to be any poverty relief when unemployment insurance only increases unemployment? It doesn't matter if you cut back on the waste created by unemployment insurance or create more stringent forms of conditionality because politicians cannot escape economic reality, no matter hard they try. In my humble opinion, if politicians are going to try anything, it should be collaborating on solutions that actually work instead of squabbling over Obamacare and debt ceilings while shutting down the government.

11-16-2014 Addendum: Add the Federal Reserve Bank of St. Louis to the list of those who found that unemployment benefits create substantial issues (in this case, moral hazard and monitoring costs). Apparently, the basic universal income would be a better policy alternative in comparison.

2-2-2015 Addendum: This study is worth the read (Hagedorn et al., 2015) because it shows that removing unemployment benefits added 1.8 million jobs to the economy in 2014.

Thursday, October 3, 2013

100 Years of the Income Tax: Just What We Needed

When people hear the word "anniversary," one either commemorates a travesty or celebrate an event such as a birthday or wedding. But the income tax? Why not? On October 3, 1913, which is one century ago from today, Woodrow Wilson signed the Revenue Act of 1913 into law. Prior to, the Supreme Court declared the income tax unconstitutional (Pollock v. Farmers' Loan and Trust Co. , 1895), but was circumvented when the income tax had been declared constitutional via the amendment process. This act was the piece of legislation that has made the federal income tax a part of American taxation ever since. I'm sure that there are those on the Left celebrating because it has provided much revenue to fund their favorite pet projects. However, I am much closer to lamenting than I am celebrating this anniversary. As concisely as I can write, I have to beg the question of why should I bother to lament in the first place.

The leviathan tax code has taken on a life of its own. In 1913, the federal tax code was only about 400 pages, and the income tax code started off with a mere four pages. Now, the federal tax code is so complicated that it takes up nearly 74,000 pages, and it's constantly changing. How many people can honestly say that they can read all the stipulations on the income tax code and actually understand it, let alone keep up with all the changes? What about the IRS' incapability of defining something as essential as income? With all the loopholes and exemptions [for special interests] that were created, should the inefficiencies and waste created by the IRS surprise anybody?

The income tax rate has increased dramatically since its implementation (Tax Foundation; Tax Policy Center). Along with the income tax rate, a couple of other factors have increased. Historically speaking, this country has had a much smaller debt-to-GDP ratio prior to ratification of the income tax, and so was the burden of federal spending (in terms of percentage of GDP). Yea for the ratchet effect! Ever since, the income tax has given the federal government much greater ability to spend more and aggrandize in the process. Essentially, the income tax was the means by which government could become the bloated, oversized nanny state that keeps people dependent on government.  (As a side note, an increased tax rate does not mean more tax revenue, either, especially when looking at tax revenue as a percent of GDP.)

Although it's nice to mention the joys of how taxation collects more revenue, taxation has a secondary function: disincentivizing behavior. What sort of behavior is an income tax discouraging? Earning income. Considering the progressive nature of the income tax (which is wonderful because whatever happened to equal treatment under the law?), those with higher incomes feel the sting even more, which is unfortunate, especially since those in the highest quintile are the ones in the best position to create more jobs. The income tax ends up distorting business investments and financial planning. If the principle is "the more you make, the more they take," how long will it take before a business owner realizes it's either not worth it to have so many employees or even continue running his business?  

Although my purpose of the blog entry is not to come up with an alternative to the income tax at this given moment, how about suggesting a consumption-based tax, even if it is a tad more progressive in nature? Since I wouldn't want to create shock to the system, I would be for a gradual repeal of the income tax, and have it replaced (not in addition to, but in lieu of) with sales taxes, value-added taxes, or other consumption and excise taxes. In addition, I would want a more gradual repeal because we still need to pay off our debt, which is going to need to entail larger revenue in the short-to-medium. Even with all of this, what I hope from today is that it doesn't take another 100 years for the American people to realize just how adverse the income tax really is.

Tuesday, October 1, 2013

Pirkei Avot 1:4 and 1:5: There's No Place Like Home

Home is where the heart is. Charity begins at home. Even the chickens come home to roost. For many people, the home is more than just an abode or a dwelling place to protect oneself for the elements. It is supposed to be a place where something more transformative and meaningful takes place. As I was studying Pirkei Avot with a dear friend yesterday, I ended up asking what the purpose of a home is, particularly in a Jewish context. What makes for the hallmark of a Jewish home?

A Jewish home entails more than putting up a mezuzah on doorposts or making sure there is enough kosher food in the home. In Pirkei Avot, there are two opinions as to what is the [primary] intention of a Jewish home. Yosei ben Yoezer of Tzeredah opines that the home is meant to be a meeting place for the sages (Pirkei Avot 1:4). Although חכם literally means "intelligent person," the rabbis of yore interpret it to mean "Torah scholar," which is to say that the home is a gathering place for Torah scholars to meet and discuss Torah. Not only that, as the host, you are supposed to wait on them. The reason for this is based on an analogy provided by Rav. Much like being in a perfumery, by merely being in the presence of a Torah scholar, one absorbs more Torah knowledge through the process of osmosis.

Conversely, Yosei ben Yochanan of Jerusalem is of the opinion that the home is meant to be לרוחה (ibid 1:5). The reason why I don't provide a direct translation of לרוחה is because the word can have two different interpretations, depending on the vocalization. On the one hand, Rav and R' Yonah interpret לרוחה to mean "open wide," much like the tent of Avraham was open. Tiferet Yisrael interprets לרוחה as "for relief," i.e., have the place ready for food, shelter, etc. The difference between the two interpretations is that of passive and active.

Regardless, which Talmudic rabbi is correct?  I ask this question because Judaism presents a bit of a dichotomy between Torah study and good deeds. When push comes to shove, is the home meant to be an exclusive place for Torah scholars, or is it meant to be a place where anyone requiring help can wander in and/or receive aid? This question would be better answered by determining whether Torah study leads to good deeds, or vice versa.

On the one hand, Torah study is important enough to be in the recitation of Shema. It is so important that some consider it more important than any of the other mitzvahs (Babylonian Talmud, Kedushin 39b; Mishnah Peah 1:1; Mishneh Torah, Hilchot Talmud Torah, 3:3). I can see that making sense. After all, you have to know what you're doing before you actually do it, and Torah study is the way to acquire said knowledge. On the other hand, Torah scholars will not just go anywhere because they do not frequent the homes of those with "low spiritual standards" (R' Yonah). It takes time and effort to make it a spiritually appealing place for a Torah scholar to spend his time there. Looking back at the hospitality homily in Genesis 18, the Talmudic rabbis (Shabbat 127a) concluded that hospitality (הכנסת אורחים) is so great that it is even greater than receiving the Divine Presence. As another insight, why does one put on the tefilin (תפילין) for the arm before the tefilin for the head? It is to act as a reminder that action precedes thought. It doesn't take years of profound Torah study to know that הכנסת אורחים is an important mitzvah.

So rather than say that your house needs to have one function, why not realize that a home can serve multiple functions? After all, a house has multiple rooms in which the abode can be multi-purpose. Since the Pirkei Avot teaches ideals in a Jewish, ethical context, there would be no reason to say that one is more important than the other: both are necessary for a vibrant Jewish home. Looking back at Pirkei Avot 1:2, the world stands on three principles: תורה (Tosafot Yom Tov interprets this to be active study of Torah, as opposed to passively accepting Torah as a concept), עבודה (literally meaning "service," interpreted as prayer), and גמילות החסדים (acts of loving-kindness). The concept of the home is embodied within these three principles. The communal home, i.e., the synagogue, is a place for prayer. An individual's home takes care of the other two principles. By being a place for both Torah study and acts of loving-kindness (e.g., הכנסת אורחים), the Jewish home actualizes its full potential.