Increased Spending = Large Spending Cuts?
Those familiar with budget battles in Washington know that whenever budget plans are revised such that proposed spending increases aren't as great as previously planned, that's called a "cut." The same logic applies at the state level.

In an analysis of the recently Minnesota budget for the next fiscal year, the St. Paul Pioneer Press warns that "Gov. Tim Pawlenty's no-new-taxes pledge may become a liability later." At issue is a feature of the Minnesota budget, longstanding, that effectively subsidizes city governments in the rural areas of the state with moneys taxed away from the Twin Cities metro area. According to a report from the State Auditor "646 small cities get an average of 40 percent of their revenue from other taxpayers," and for one city, the number is over 90 percent. Local government aid has been trimmed, and so some raise-the-tax-rates advocates (at the state level) complain that property taxes will soar at the local level, lest fire, police and other local services be cut.

Overall, the "liability" article cited above suggests calls the budget decisions enacted "the largest downsizing of state and local governments in Minnesota in more than two decades. As mentioned in yesterday's entry, it is true that state spending will actually be reduced--by less than one percent. But by the end of the two year cycle under which budgets are made, spending will have increased from the current biannium. So an increase is ... "the largest downsizing ... in ... decades." And you thought that tax
forms were confusing. (permalink)

Minnesota General Assembly Adjourns. Wheh!
The General Assembly of Minnesota has adjourned--without a tax increase. Coming from the state that gave the nation Walter Mondale and Paul Wellstone, that's nothing short of remarkable.

According to a Start-Tribune wrap-up on the session, DFL legislators call the budget a "retreat from decades of generosity." Uhm, if I take money from Smith and give it to Jones (while keeping a bit for my expenses, of course), am I truly generous? Generosity is a virtue, but generosity with other people's money is virtue on the cheap. Likewise, the end of so-called "humanitarian care for our states most vulnerable citizens" confuses policy with virtue.

The DFL leadership calls the various reductions in spending "a ruthless dismantling of the safety net." Chicken little, call your office. For starters, it's simply untrue that (at least some of) the money at stake is the one thing that separates the most financially desperate people from third-world poverty. As one Republican leader notes, he "can't understand why a family of four making as much as $60,000 could get the state to pay for half of its child-care costs." Aren't people who create children supposed to be the ones who take care of them?

This budget being the result of the political process, there's no doubt that some things in the budget got messed up. DFL leaders charge that some cuts will mean the end of outpatient care for some people on the dole, which and they will in turn end up in emergency rooms instead, costing taxpayers even more than would otherwise be the case. That's a plausible claim. The answer, though, is not to keeping adding money to the status quo, but to try out innovative ways to turn the functional control of Medicaid spending from government officials to Medicaid families themselves. The Buckeye Institute and the National Center for Policy Analysis have teamed up to offer one such proposal worth considering.

As the Pioneer-Press reports, the two year budget--for all the cries of cuts and the death of all that is good about Minnesota--does increase over its two year span.

Under the bills, total state spending will decrease by about one-tenth of 1 percent over this year, and then increase by 2 percent in 2005, according to the Finance Department.

So much for the claim by the Senate DFL leader that the budget represents "the most radical turn to the right since the 1920s." Actually, he may be correct. Congratulations to Governor Pawlenty and his colleagues in the Republican-run House for standing firm against the DFL call for yet another tax increase. (Minnesota is, after all, the 3rd highest taxed state).

When individuals and families fear job loss in an era of dramatic economic change, retraint in government spending is necessary for good government, and economic growth. Too bad that this counts as "a radical turn," but the current budget is a start.

Labels: Medicaid

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I'm a Volunteer. Pay Me!
I do projects for a lot of non-profit organizations, and every one of them has a disclaimer to the effect that "we do not accept government funding." That would seem obvious--isn't a non-profit group one that gets its money from donations, either from foundations, corporations, or individuals?

Actually, no.

It turns out that many nonprofits rely on involuntary donations, or as we usually call them, taxes. A report from Jim Ragsdale in the St. Paul Pioneer-Planet tells the tale of three allegedly volunteer programs, all of which rely on taxpayer money to one degree or another.

Ragsdale crisply describes the contradiction, and the bipartisan political problem it creates:

Funding for volunteers? [Minnesota's governor, Tim] Pawlenty himself has questioned why state money is needed for voluntary service. The state contributes $2.1 million per year toward three national volunteer programs: Foster Grandparents, Senior Companions and the Retired and Senior Volunteer Program, known as RSVP. The governor, faced with a $4.2 billion budget deficit, recommended eliminating those grants.

But due to political pressure from the "volunteers" in the story, the proposed cuts are history.

When the state needs to cut corners everywhere it can to meet a looming budget deficit, this is a bad development on several levels. First, it means that another (potentially) good program somewhere else will be cut instead. Second, it means that the enterprise of volunteering has been corrupted by the political world.

Finally, it speaks to the politicization of our lives on a personal level. Said one man of the (alleged) volunteer organization he participates in, "It gives me a purpose .... I'm so grateful to have something to do, and something as fulfilling as this."

He has a purpose? Good for him. It's pathetic, however, that his vision for the funding of his activities is limited to picking the pockets (all legally, of course) of his fellow citizens. (permalink)

Conceal Carry Takes Effect in Another State
Recently, Minnesota became the 34th state to enact conceal-carry, or "shall issue" laws. Typically, these laws provide a statewide standard for who is and who is not allowed to carry a concealed handgun. Absent such laws, local authorities have greater discretion.

As the St. Paul Pioneer Press reports, the new law "calls on the state's 87 sheriffs to give permits to law-abiding, mentally competent residents who are at least 21 years old. Before, police chiefs and sheriffs were in charge of granting or denying permits under a law that gave them wide discretion and called on the applicant to prove an occupational or personal safety need." Interestingly enough, the law, which mandates a $100 permit fee and the completion of a safety class, which runs around $300, raises the bar for residents of some counties. Said the sheriff in one rural county, "It used to be if you said you had a DNR gun safety class when you were 12, that was good enough for us. That's not going to fly anymore."

Opponents of shall-issue permits display the same sense of unreality that pacifists do in foreign policy. C.S. Lewis wrote of the pacifists, during World War II,

Only liberal societies tolerate Pacifists. In the liberal society, the number of Pacifists will be either large enough to cripple the state as a belligerent, or not. If not, you have done nothing. If it is large enough, then you have handed over the state which does tolerate Pacifists to its totalitarian neighbor who does not. Pacifism of this kind is taking the straight road to a world in which there will be no Pacifists.

In a similar way, a prohibition against citizens protecting themselves against the inevitable rogue elements of society will make for a less safe society. (Unlike the international arena, police power is obvious and present in the states. But even the police can not be everywhere, nor can the prevent all crime.)

Even so, a loose group is gathering to oppose the new law, supposing that they can protect people by removing their ability to protect themselves. Rev. James Erlandson, co-chairman of the coalition, states, "We have a right to safe communities free from the threat of firearms.''

Pace Rev. Erlandson, what we ought to be free from is crime, and the record is clear: conceal carry laws probably do reduce crime. This has been the case in Texas, and in other states as well. Such laws may have reduced murders and severe assaults by 7 to 8 percent.

At a more philosophical level, the controversy comes down to a matter of trust. We need and have police and sheriff departments to do their important work. But is public policy going to work on the assumption that, given the right incentives and guidelines, people can be trusted, or not? Given the record on gun control and crime, I'll go with the people. (permalink)

Democracy + Government Spending = Threat to Freedom
In the modern world, democracy is the most effective form of government we have found for advancing personal freedom and human well-being. As Winston Churchill allegedly said, democracy is the worst form of government, except for all others. Look at the countries that are the wealthiest, healthiest, with the most output of creative talent, and are most likely to respect civil liberties, and you are looking (without exception, I believe) at democracies.

Democracy, at its best, means more than mere majority rule. A democracy in which a majority of voters approve of cannibilizing a minority is hardly an ideal society. As this example (admittedly, far-fetched) suggests, the rule of majority vote, absent other restrictions on public or private behavior, is a cruel one.

And so today, John Derbyshire argues that government employees should not vote, nor should they be allowed to unionize, lest they drive public finances to the abyss, and limited government from the land. The dangers of a large public sector workforce, enabled with the franchise and equipped with a union, are seen in New York State. Excessive government spending there--egged on by public sector unions--has lead to a public deficit of $11.5 billion out of a total budget of $40 billion.

Just how has this ballooning of public obligations occured? Listen as Derbyshire paraphrases Fareed Zakaria:

If a group of 100 farmers got together to petition the government to give them $10 million, the benefit to each farmer is $100,000. The cost to the rest of the country is about 4 cents per person. Who is more likely to form a lobby, them or us? Multiply this example by thousands and you understand the central problem of American democracy today.

In other words, each proposed increase in spending brings an intensely motivated collection of voters--and in politics, intensity is key. Each successive demand on the taxpayer is mild enough (though the cumulative effect is large) that it is irrational for most people to push back against the "more" crowed. That's why taxpayer advocacy groups are so small in comparison with organized groups of people whose livelihood depends on the tax-collect-redistribute system of government.

Public sector unions, such as the NEA (the union for government-operated schools) and AFSCME (the union for everyone else) are never satisfied with their pay--nor the size of government programs. Again, to quote Derbyshire:

Can you vote yourself a pay raise? No, and neither can I. Bill Bureaucrat and Pam Paperpusher can, though, and they do. Bill and Pam have no problem at all with ever-swelling public budgets, with ever-expanding public services, with the creeping socialism that is slowly throttling our liberties out of existence.

Lest you think that Derbyshire, or I, am being too hard on government employees, I know from experience (having worked for the Defense Department) that many, even most government employees are well-intentioned folk who work hard. But given the choice between a candidate who hopes to cut government programs and budgets, and one who wants to expand them, which is the logical choice for the public sector employee?

(A dirty little secret, by the way, is that many nonprofits depend heavily on government funding. So they, too, lobby for ever-higher taxes, and ever-increasing government budgets.)

Derbyshire recommends revoking the franchise of public sector employees. He admits that it is a fantasy, a dramatic idea that will never be enacted. And given the fact that, like the nonprofits, statutory employees of government are not the only ones who prosper from the machinations of bloated government, it's an impractical suggestion as well. At least, though, this private sector worker has done a good public service by pointing out the problem.

Not surprisingly, the single largest employer in many states is not an icon of American business--GE, Sears, or even the ubiquitous McDonalds--but government. (permalink)

Is a Tighter Seat Belt Law Coming to Your State?
In yet another trend towards federalizing crime and regulations, the National Highway Traffic Safety Administration (NHTSA) is trying to get more states to pass "primary" seatbelt laws. In a majority of states, police officials can write a ticket for not wearing a seat belt only if they stop a motorist for some other infraction. In the "primary" states, however, simply going beltless is reason enough to bring on a visit from the long arm of the law.

NHTSA, of course, sites the well-known fact that seat belt use is a good thing, and that seat belt usage is higher in states with "primary" enforcement. But federalism--a crucial tool that the Founding Fathers relied on to protect and guarantee freedom--is undermined if laws beyond the beltway are made under fiscal pressure from unelected officials in the national capitol. The golden rule is the reason that NHSTA has any power in statutes regulating the operation of motor vehicles--a function for states. NHSTA has the gold, and so it makes the rules. Actually, it doesn't make the rules, formally, but states ignore the agency at their own peril.

Only New Hampshire has no seat belt law governing drivers and adult passengers, but, the article notes, "59 percent buckle up anyway." Says the coordinator of the New Hampshire Highway Safety Agency, “The legislature has chosen not to pass a law, feeling that once you are an adult, you should be smart enough to know it makes good sense to wear a seat belt." (permalink)

Trust Your College Savings to ... the States?
From the people whose unrestrained appetite has brought billion-dollar deficits .... college plans for your children?

Today's Wall Street Journal [paid registration required] carries a page one article on the way that states are changing the rules on 529 plans that parents use to save for their children's college education. While it is an interesting story of feuding states, there's a more serious philosophical problem that the article never mentions.

A little background, first. The 529 plan, like various forms of the IRA, is a tax-sheltered savings account. It's meant to encourage people to save for college (usually for dependents). If money is withdrawn from the account for education-related expenses, there is no federal income tax liability. Many states offer similar benefits. The plans are administered by the states, which typically contract out the responsibility to a mutual fund company such as T. Rowe Price. They are attractive to families not only for the tax savings, but because they have high contribution limits--much higher than other tax-favored programs. Wealthy families, who are often not allowed to participate in other plans, can participate in 529s.

The Journal article, by Tom Lauricella, concerns the legal barriers that states are enacting to discourage parents from shifting their money from one state's plan to another. New York, for example, now imposes taxes if the money is taken from New York and sent to another state's plan. Some parents quoted in the article complain that states are not changing the rules in the middle of the game, and they are right. How can an investment be properly planned and executed if the rules surrounding the taxation of that investment be changing throughout its lifetime? (The federal income tax code--including the revisions that will be incorporated by the second Bush tax cut--is the supreme example of this chaos).

Are the states not playing nice, by changing the rules? Is Illinois, for example, being unfair imposing taxes on withdraws that it makes from 529 plans offered by other states? Yes. But even more troubling is the fact that Illinois, and each other other states, has 529 plans at all. There are plenty of financial firms willing and able to help parents save for their children's expenses--usually the same firms that are running the state's plans. Why should the states even be involved in this activity in the first place? If there is a legitimate policy need to expand the options for tax-sheltered savings, it should be pursued through reforming existing laws, such as lifting the income limits on Education IRAs.

The incentives are all wrong. The state of Virginia, for example, gets $2 million a year in overhead. The Treasurer of Illinois, under a contract with Citibank, gets to direct a significant marketing program for that state's 529 plan. Her name must, by contract, appear in all advertising for the program, and she often appears in broadcast ads. Nothing to enhance one's political career than to frequently appear in advertisements, paid for by someone else, that pitch a solution to a highly desired product (the ability to fund a child's college education). (permalink)

The Memories We Keep on Memorial Day
Laments over the lost meaning of shared ceremonies and symbols, such as national holidays are nothing new. Paul Beston offers up one of the latest critiques of the cultural meaning of our holidays in his take the "lower case holidays," those holidays, once celebrated on a specific day, but since shifted to become the backstop to the great American institution, the three-day weekend:

holiday seems to have taken on its own commercial identity. Memorial Day means summer wear and getaways; Labor Day is for back to school supplies and fall clothing; Presidents Day is about car sales, with makeshift Washingtons and Lincolns hawking zero percent financing on TVs and at dealerships.

According to Beston, "With the exception of religious days, there are no American holidays anymore that do not involve the concept of celebration." When he overstates the case--July 4 is still a solid, widely-observed holiday with events all of its own--it confirms the overall point that holidays that get shifted also get shafted. July 4 is still largely observed on a specific date, not "the nearest Monday."

What does this matter, though? Here's why it matters: despite all its troubles, the US of A is one of the best political, social, economic, and cultural systems known to human history. It didn't get there by accident, but through the hard work of people living and dead--including those who have served in our military.And it got that way through the genius of the founding fathers, who understood that though men are no angels, government can be so constructed as to give them the best possible shot at living freely.

From the National Review archives, David Koppel reminds us that building and maintaining a free society requires right thinking:

Memorial Day — like Passover, Independence Day, and other celebrations of freedom — is a day for reminding ourselves, and teaching our children, that our present happy circumstances are not the mere result of good luck, but instead the result of right thinking.

Now, I'm not trying to be a scold here--I like three day weekends as much as anyone, and while I paid a trip to a field of green this morning, it was not to a veterans' cemetary, but to a golf course. So take today's entry as my small effort of acknowledging the honorable tradition of those who have gone before us, and serve our country even today.

Labels: Golf

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Campus Conservatives
The New York Times Magazine has a profile of campus conservatives. As might be expected, the article is both interesting and not entirely accurate. For example, it mentions that conservative groups such as the Intercollegiate Studies Institute "spend money in various ways to push a right-wing agenda on campuses." True enough. What is unsaid is that PIRG (a group founded by Ralph Nader) spends money to push a left-wing agenda on campuses--by extracting payment from unwilling students.

At least there is some consistency here. Conservatism, especially of the kind that emphasizes free markets, advocates the advantages of free exchanges, while "liberalism" as commonly understood, is funded through involuntary exchanges: taxes and mandatory student fees that go to groups such as PIRG.

The article also emphasizes the role of Republican Party operatives. Well, the GOP officeholders are often friends of conservative ideas, but sometimes not (see Olympia Snowe, Lincoln Chaffee, Arlen Specter, and the former Republican, Jim Jeffords). And of course, many "conservatives" look to the Republican Party only as the best available political tool (dismissing Libertarians as too small and insignificant) to advance their ideas, not as something valuable in its own right.

A few other points worth noting: public opinion polls find that students today are more likely to favor "casual sex," which could be explained away as a reaction to AIDS--yet how then to explain a decline in support for abortion-on-demand but a shift in sexual ethics? Also on the downswing: belief in progressive taxation and arms control. This does not mean that the student body of your nearest state U is likely to resemble the ideological profile of delegates to the Republican National Convention, but in a place where "progressive" ideas are the institutional norm, these changes are significant.

If, as the author says, "It can be disorienting to hear conservatism advanced as the ideology that frees women," maybe she needs to get out more. I detect the spirit of the Manhattan-based arts critic--perhaps she worked for the Times as well?--who could not understand how Nixon was elected, since no one in her social or professional circle voted for him.

The convictions of the conservative students mentioned in the article are explained away as "something that someone told them," talking points from outside groups. There's no denying that outside groups help conservatives explain conservative themes, but again, there is a lack of balance here: no indication that PR-spinning is a tool of right AND left, which leaves the sloppily-reasoned conclusion--implied, not spoken--that these students are mere rubes and fools, the conservative version of the "useful idiot."

One other interesting tidbit is the fact that the group profiled in the article seeks to portrary itself, in terms of style, not as conservative, but as rebellious--in rebellion against the (to use a buzz phrase) dominant paradigm of the campus. "Rebellion" attracts youth as honey attracts flies. Some things never change.

UPDATE
Over on National Review, Jonah Goldberg takes an especially critical look at the NYT piece. Clearly, he's annoyed, finding the report filled with condescension.

The Times has kept alive its tradition of undermining any text flattering to conservatives — should there be any — by depicting conservatives as joyless jerks or psychos.

There's still this condescending sense that what makes them [conservatives] tick, let alone what makes them successful, has to be based in either their ignorance or their iniquity. Sure, Colapinto is honestly conveying his astonishment that young conservatives are people, but that astonishment is still insulting and old news.

Truly, some people need to break out of their cultural cocoon. (permalink)

What Does Google Say About You?
Though this Boston Globe article on the social implications of Google--A Nation of Voyeurs--is now several months old, it's worth pointing out to those who have not seen it. I was pointed to it at the time by National Review, but something prompted me to look it up again today. I found it, of course, through Google. It's a fascinating, if haunting read about how information on the Web by and about a person can come back and bite in a big way. Judicial and government executive appointments are sometimes deep-sixed due to a controversial or embarassing "paper trail" of law school review articles and the like. Now we will have a "google trail." (permalink)

Are Schools Underfunded? No, but the Pentagon May Be.
The old cliche is that the Pentagon should have to hold bake sales to purchase bombers, but that schools should have all the money they need. Writing in National Review, education scholar Dr. Jay Greene asks, more or less, for the opposite.

According to a widely-held, but incorrect sentiment, schools never have enough money. But, Greene points out, government-run schools spent $8,830 per child nationwide during the 2000-1 school year, almost double the amount ($4,626, in 2001 dollars) spent 30 years ago. Almost double! If money alone were the answer, we would all be living in Lake Woebegone, where all the students are "above average."

Greene notes that we spend more money on education than on national defense. He ends with this thought:

The hard reality is that we spend a large amount of money on education and have every reason to expect something in return. We spend considerably less on national defense and yet reasonably expect our armed forces to protect all of our lives and fortunes from foreign dangers. And the armed forces do this difficult job without soliciting donations and without an army of apologists blaming their shortcoming on a lack of funds. It will be nice when educators adopt a similar "can-do" attitude.

More amazing things have happened.

Labels: Education

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Message to State Governments: Reform Yourselves
An article in today's Wall Street Journal [paid subscription required] notes that what Congress and the President give back in tax cuts, the states may take away in tax increases. The Journal cites economist Mark Zandi, who argues that a half-percentage point of economic growth will be surrendered in the name of balancing state government budgets.

The article also says that state budget officials are happy that the tax on dividends was not eliminated altogether; 37 states rely on the federal definition of income, so the elimination of federal taxes on dividends would mean the elimination of state taxes on dividends, too. (Hey, not a bad idea!)

With states facing a collective shortfall of $85-90 billion dollars, watch out for more tax increases. To date, the article notes, most states have met fiscal challenges through accounting gimmicks and dipping into reserves ("rainy day funds").

Half of the $20 billion bailout to states is to go to Medicaid spending in the states, which the Journal says is a "main driver" of state deficits. Left unsaid is that the states have expanded their Medicaid programs beyond reason, often offering coverage to families at 200 percent (or more) of the federal poverty level.

While state legislatures wrestle with current budget problems, they need to look beyond those and make systematic changes. Businesses across the country are shedding divisions to focus on core competencies. GE started this trend under the now-retireed CEO Jack Welch, who wanted each of the company's businesses to be either #1 or #2 in its field.

Clearly, government in the U.S. is competent at some things--raising and deploying military forces, and (at least by world standards) administering a system of law and justice. But it is less qualified, and has less of a moral claim, to undertake so many other tasks that it has now assumed. Earlier this year, I played a small part in a report issused by the Mackinac Center that outlined ways that the State of Michigan could focus on what should be its core competencies. States across the country need to engage in this kind of analysis--and then act on it--rather than call out to Washington for more cash, or raise taxes at home.

Labels: Medicaid

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New Tax Bill: Good and Bad
It looks like President Bush will be able to claim--unlike his father--that he brought a tax cut to the American people. Good for him. And good for us. But as this AP story tells, the package is less impressive than it would at first appear.

No, the problem is not that the cut is less than half of what Bush asked for. Presumably, the original call for $725+ billion in tax cuts was a high bid that the Administration did not expect to see survive the Congressional process.

The figure $350 billion will soon be thrown around as a description of an "economic package." But not all of that package is good for the economy. Lost in that number is that fact that the actual tax cut is only $330 billion.

Where did the other $20 billion go? Well, it's going to, as the AP puts it, "fiscally strapped state and local governments." And how did they get into that condition? In large measure, by indulging in a spending binge during the "we have licked the business cycle" 1990s. As the American Legislative Exchange Council argues, this simply rewards profligate spending by states, whose spending was somehow able to grow faster even than the economy. (permalink)

If it's Spring, it Must be Motorcycle Time
Should motorcyclists be required to wear helmets? The Detroit News reports on yet another attempt--the 20th, actually--to repeal or amend the Michigan law that requires all motorcycle riders and passengers to wear helmets. Proponents of the law cite the safety benefits of wearing helmets; opponents object to the idea of being told what to do. What helmetless riders increase insurance costs for the rest of us? Insurance companies are run by smart people; they can find ways to adjust premiums to reflect the increased risk of riding without a helmet.

It's hard to have much conviction on this matter, either way. When Americans must work until early April for Tax Freedom Day to arrive--the point after which they are working for themselves, not governments of various sorts--the fact that one is required to wear a helmet while on a motorcycle is a comparatively trivial complaint. Which is more a more significant government intrusion into personal freedom: dictating what motorcyclists wear on what is, in many states, only a seasonal hobby, or requiring people to turn more than three month's wages out of twelve to public programs, some useful, many destructive or simply unconstitutional?

Even so, ride on, bikers. (permalink)

Too Many Ph.D.s
Writing in USA Today, Laura Vanderkam writes that there are too many Ph.D.s being turned out by universities.

The old joke is that a Ph.D. in history would qualify you for driving a taxi. Today, however, that person has been upgraded, if that's the word, to driving a school bus, as was the case of a woman with a Ph.D. in European history.

Roughly 45,000 new Ph.D.s will be graduating this year, Vanderkam notes, a number that is up 100 percent 35 years ago. Frequently, these folks will end up being something other than what they had hoped for, a tenured professor. One survey found that 10 years after earning the Ph.D., a mere 8 percent of English majors were tenured professors at Ph.D.-granting universities.

Given the rigors of graduate school, I can't help but admire the tenacity and intelligence of someone who had earned the Ph.D.

But what to do with this glut? To the extent that would-be professors know the odds, it's their problem. But as Vanderkam points out, universities should offer their grad students a more realistic picture of what awaits them.

What Vanderkam does not point out, though, is that this paucity of work is mostly a problem for students in the social sciences and humanities. It is abetted by an academic culture that over-emphasizes research and publishing, and places too little value on teaching. Many departments simply need an excess number of graduate students to staff undergraduate courses.

I don't know what the answer is, but the use of market-based incentives in the university is probably part of the solution. Socialism has a strong hold in higher education, not only in the ideology of professors, but in the business model. (permalink)

Price Controls on Pharmaceuticals: The Problem
In its decision, the Supreme Court mentions (in a footnote) and then brushes aside one problem with the Maine Rx problem: moral hazard. That is, individuals (or more likely, employers who administer most private-sector health insurance plans) could (if state law allows) save a few bucks from insurance premiums by dropping prescription drug coverage and then turning to the public program.

A more serious problem with prior authorization and formularies is that it is yet another step down the road towards smothering a vital industry through government ownership. Already, roughly half of all health care is paid for through government dollars, and remember that in politics, the golden rule applies: he who has the gold makes the rules. Formularies, bulk purchases, and the like are another step towards nationalized medicine.

By the way, here's a press release from a ready-reference guide on the whole topic of prescription drug pricing and government programs, courtesy of the Institute for Policy Innovation.

Labels: Health care

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Price Controls on Pharmaceuticals: Reviewing the Court Opinion
So what did the Supreme Court say in PhRMA v. Walsh? Keeping in mind that I am not an attorney, here is my take on the decision, which is available through the Supreme Court decision. My comments are [in brackets.]

Section 1:
As a joint federal-state program, any changes that states make to their Medicaid program must be approved by the Secretary of Health and Human Services (HHS). In the 1980s, states started creating formularies--lists of drugs that they would buy for Medicaid." They also started using "prior authorization" (PA) requirements for Medicaid and other programs. Under PA, a doctor who wishes to prescribe a drug for a patient must consult the formulary. If the drug is there, fine. If not, he must petition the government for approval. [Medicine by bureaucracy!]. HHS started approving these programs because they lower Medicaid costs, by design and practice. Congress subsequently gave its approval to these programs. It went further, and required that drug companies wishing to sell to Medicaid rebate a portion of the price. It also ratified prior authorization.

Section 2:
Maine enacts a law requiring any company that sells drugs to any publicly financed program in the state to give rebates to the State Commissioner of Human Services. The products of companies that do not comply will be subject to prior authorization. A "Drug Utilization Review Committee" will be created to determine what drugs are suitable for prior authorization, and which can be purchased only after a case-by-case review by government officials.

Section 3:
PhRMA, the trade group, filed suit. In affidavits the group presented, company officials state that prior authorization requirements for any particular severely curtails sales of that drug, and shifts physician and patient loyalty to other drugs, or even other companies. [Naturally!]

Section 4:
The district court granted an injunction, keeping the program from operating. It said that federal law prevented the program from going forward, since it could end up hurting Medicaid recipients. And prior authorization requirements could hurt someone on Medicaid, the district court said.

The Court of Appeals disagreed. It said, first, that federal law explicitly permits prior authorization requirements. It also said that a prior authorization program actually furthers the goal of Medicaid--furthering the provision of medical services--by helping those with insufficient means. [Hmm. I guess anything that makes medicine cheaper is ok, then, by this reasoning.] Further, the Appeals Court said, this program [through rebated prices for non-Medicaid people] may benefit Medicaid by keeping people off of Medicaid who might otherwise be driven there by high drug prices.

Section 4
The question at hand is whether the District Court overstepped its bounds by issuing the injunction, not whether the Maine Rx program is valid.

It is possible that HHS could approve the Maine program as an amendment to its Medicaid program. In fact, the amicus brief we received from the US government makes us think that HHS may endorse this program.

Section 5
The District Court ruled that the Rx program hindered Medicaid and had no Medicaid benefit, which makes it contrary to federal law. But Maine never said outright that Rx lacked a benefit to Medicaid, it just never mentioned one.

But we believe that Rx is indeed meant to benefit Medicaid. First, it does provide medical benefits to the "medically needy." Second, "there is the possibility [!] that, by enabling some borderline aged and infirm persons better access to prescription drugs earlier, Medicaid expenses will be reduced." [Ah yes. Anything that might reduce public spending is justified.] Third, prior authorization requirements do save money--we know that from the testimony of the drug makers themselves that spending on their drugs goes down under PA.

Now, does PA curtail Medicaid recipient's access to prescription drugs? That would be enough to overturn the program. Or would it? A prior decision (Alexander v. Choate) gives states great latitude in deciding what medical care is in the best interest of recipients. In that case, Tennessee was allowed to reduce the amount of days it pays for inpatient care from 20 to 14 days, and that doing so did not reduce "meaningful access" to medical services. [Reducing hospital stays by one-third is not "meaningful"?]

The prior authorization requirement "is assumed [!] to have only a minimal impact on Medicaid recipient's access to prescription drugs." Hillsborough County. v. Automated Medical Laboratories established that federal law does not pre-empt state laws designed to foster public health. So "the mere fact that prior authorization may impose a modest impediment to access to prescription drugs provided at government expense does not provide a sufficient basis for preemption of the entire Maine Rx program."

At this point, the degree to which any Medicaid patient would suffer from a PA requirement is "a matter of conjecture," and in fact, we can't say that even one person will suffer.

Does this affect drug companies? We have affidavits that such requirements affect their sale of specific drugs, but that's irrelevant, since, hey, it saves money for Medicaid.

Does this affect physicians? Not really. They have learned to deal with PA requirements imposed by HMOs. This is just more of the same.

Should HHS approve this program as a modification of Medicaid in Maine? We offer no opinion. Should HHS refuse Medicaid money if Maine does not seek that approval? Again, it is not for us to say.

Section 6
We do not buy the claim that the Rx program violates the Commerce Clause. It makes no effort to regulate the price of a transaction that occurs outside of Maine. This does affect drug companies, to be sure, and if it affected only out of state drug companies but not in-state drug companies, it would be an unfair tax, and that would be a different matter. But it "will not impose a disparate burden on any [outside] competitors"--because there are no drug manufacturers in Maine.

Section 7
PhRMA has failed to establish its case.

Labels: Medicaid

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Price Controls on Pharmaceuticals: Supremes Turn Back Challenge
Thanks to advances in science, prescription drugs are playing an ever-larger role in health care. Even though increased use of drugs can lower overall health care spending, their rising costs pose problems for three groups: senior citizens who depend on Medicare (which does not pay for prescription drugs), the uninsured (who, obviously, don't have insurance to pay for the drugs), and state politicians (who must not only find ways to pay the drug bills incurred by Medicaid, but respond to clamoring constituents.)

In 2000, the State of Maine enacted Maine Rx, a program which officials claim would cut drug prices by 25 percent. The Associated Press and Washington Post review a recently issued Supreme Court opinion on a legal challenge to the program.

Under the plan, which attempts to use the state's bulk purchases of drugs for the Medicaid program as a bargaining chip, the state would buy even more drugs, at discounted Medicaid prices, for people who are not on government assistance. As the Post summarizes it, "Maine Rx empowers the state to require that drugmakers who want to sell to the state's Medicaid patients also finance a rebate on medicines for non-Medicaid patients. Drugs made by companies that refuse can be sold to Medicaid only if a state official gives 'prior authorization'--a significant handicap."

The Pharmaceutical Research and Manufacturers of America, a trade group, filed suit, arguing that the program (again, quoting the Post) "amounted to regulation of interstate commece by one state and that it conflicted with the federal government's authority to se the rules of Medicaid." The AP story adds this kicker: "If prices don't drop in three years, the state could impose price controls."

Labels: Health care, Medicaid

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No Income Taxes for Senior Citizens?
Talk about your senior discount.

The Oklahoma House recently approved, in a unanimous voice vote, a proposal to exempt all senior citizens from the state’s income tax. (Currently only income under $25,000 per person is exampt.) Said a supporter of the measure, "This would help all of our senior citizens within the state.”

Sure, it would help the senior citizens of Oklahoma if they didn’t have to pay income taxes. It would help anyone to not have to pay income taxes. And as a rule, I think most people ought to pay fewer taxes than they do.

But if there is “no taxation without representation,” we ought to consider the reverse—“no representation without taxation.” No, I’m not proposing a poll tax, though that may not be such a bad idea. What is a bad idea is exempting people from paying taxes solely on age, rather than on their income or consumption. Like anyone who is spending over people's money, those who can enjoy the benefits of public spending without having to pay for them are likely to overbuy.

Unanimous votes by legislatures are usually symbolic, and the story above suggests that the proposal will quietly die in the Senate. I suspect, then, that this was merely an exercise in grandstanding by the members of the House. But what a bad symbol. (permalink)

It's All the Lawyer's Fault
How representative is representative government? That's the question asked in the Daily Oklahoman (free registration required), which looks at the demographic and occupational characteristics of Oklahoma's General Assembly. Like perhaps most assemblies in the country, it is disproportionately made up of white men. Now, that's not necessarily an evil thing--what should be represented are ideas and policy preferences, not the color of one's skin.

But more interesting than sex or race are two other qualities: education and occupation. While lawyers make up only 1 percent of Oklahoma's population, they comprise 17 percent of its General Assembly. The assembly is also a very well-schooled bunch: 80 percent hold at least a bachelor's degee, but only 20 percent of the population does.

A similar pattern is probably found in most, if not all, states, and the U.S. Congress as well. And given the complexity of matters that policy makers deal with, the elevated levels of higher education and legal training are perhaps understandable. But I can't help but thinking of the quip from William F. Buckley, Jr. that he would rather be governed by the first 100 (or 500, or 2,000, numbers vary) people listed in the Cambridge phone book than by the faculty of Harvard.

It's hard to say which approach is better. But perhaps if we had more non-lawyers involved, there be some legislative restraints (such as "loser pays" rules to discourage frivolous lawsuits) to combat the problems cataloged over at Overlawyered.Com (permalink)

Does Lt. Governor Mean "Lightweight Governor?"
Every once in a while, you run into those jobs that make you think "Wow. How can I get that gig?" How about a job that pays a 6- figure salary, commands a staff of 30 and a budget of $3 million, and which lets you do ... whatever you decide to do.

The Daily Herald, of suburban Chicago, runs a profile of the lieutenant governor's office in the State of Illinois. Apparently, the job is light on the responsibility side. It's pretty much a "make of it what you will" job, responsible only to the governor. And it carries a $115,000 salary and a budget of $3 million to spend.

It is the only "constitutional" office in the state with no duties specified by the constitution. One occupant of the office was so bored that he quit. And no, he wasn't replaced--which makes the uselessness of the office even more obvious. (If the governor leaves office through death or some other reason, and there is no lieutenant governor in place, the attorney general takes over.)

Some state get more mileage out of the Lt. Governor's position than others. In Texas, it means being president of the Senate, a position with real, legislative authority. In Minnesota, the current Lt. Gov serves double duty as the Secretary of Transportation, saving the state a few bucks. But Arizona, Maine, New Jersey, Oregon, Tennessee, West Virginia, and Wyoming all manage to get by without one. (permalink)

Poverty Down
A new report from the Brookings Institution (generally a center/left group) finds that "The number of people living in high-poverty neighborhoods—where the poverty rate is 40 percent or higher—declined by a dramatic 24 percent, or 2.5 million people, in the 1990s."

Anecdotal evidence of this trend can be seen in a related story in the Minneapolis Start-Tribune. The story leads with the observation of a resident of a former ghetto: "This used to be a rough area," said Shirley Minor, standing in St. Paul's Central Village Park on a sunny spring morning. "You'd see guys sleeping on mattresses over in the corner of the park there. It was an outdoor homeless shelter." Now the spot is a bright and cheery playground for a day care center.

According to the story in the Star-Tribune, researchers credit job growth, and that old bugagoo of welfare-rights advocates, "gentrification," which is essentially tearing down substandard housing and replacing it with yuppie (or at least middle-class) housing.

It is no surprise that many a young family head from city to suburb in pursuit of better schools. The Buckeye Institute (Columbus, Ohio) offers a proposal for revitalizing urban neighborhoods through increased use of charter schools and school choice.

Labels: Charter schools, Education, School choice

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Minnesota Democrats Give Up on Tax Increases
Minnesota's new governor, Tim Pawlenty (R), has repeated the theme of George H.W. Bush's convention speech: Read my lips. No new taxes. Bush recanted on that promise, which is a large reason he became ex-president four years sooner than expected.

So far, though, Pawlenty has done the former president one better: he has stood firm on his position, and has encouraged his partisans in the House (where Republicans are the majority) and Senate (where they are the minority) to stand with him.

After Pawlenty threatened to shut down the state government rather than concede a tax increase, Senate Democrats gave up. Their tax package, which passed the Senate earlier in the week, included a tax hike on the top 5 percent of taxpayers as jumps on the cigarette tax and an increase in the state business property tax.

Newt Gingrich tried this technique in reverse--a legislator shutting down government in the fact of tax-and-spend executive, and we all know that ended badly for Gingrich and the Congressional Republicans. Now, Pawlenty strikes me as a smart guy (or else he has a smart PR staff), and not unusually arrogant (politicians do require a larger-than-average ego, after all, to succeed). So what makes him think that he won't face the fate of Gingrich in this game of chicken? There are obvious differences--Speaker of the House versus Governor; Gingrich's opponent stood first, Pawlenty's caved. The DFL (as we call Democrats here) figures that there will be an electoral uprising against the GOP in the next election. Maybe (one hopes) Pawlenty has a better read on the electorate than the DFL. (permalink)

Is Minnesota Retreating from the Welfare State? Part 2
Writing in the Minneapolis Star-Tribune, Dane Smith remarks that "Minnesota appears to be on the verge of a metamorphosis." Perhaps. True, social conservatives have cheered the passage of a conceal carry measure, as well as a modest restriction on abortion (a "Right to Know" measure), and Pawlenty has stuck with his "no new taxes" pledge, at least to date.

Smith quotes Gov. Pawlenty at a meeting of Republican politicos: ""We are at a crossroads for Minnesota's future." He's right of course, though it is not yet known which path the state will take: continue with the status quo of redistribution of wealth and high taxes, or increase reliance on civil society. True, the conceal carry law and the new restriction on abortion are significant, but they were bound to be enacted at some time. After all, pro-life legislation has been passed in previous sessions, only to be vetoed by the governor. Conceal carry was also enacted largely because there was no longer a governor who would stand in the way.

The last election brought the Republican Pawlenty into the governor's seat, enlarged the GOP's majority in the House and narrowed the Democrat's majority in the senate. As a result, libertarians and conservatives think there's a transformation underway. ""We are seeing a transformation from a blue [Democratic] state to a red [Republican] state," said a representative of the Taxpayers League of Minnesota. Advocates of the status quo deny that. Marcia Avner, of the Minnesota Council of Nonprofits, says that any change in the state's political culture is "only a perception." [Here's a topic for another day: in the workaday world of government, "nonprofit" often means "receives government money," which of course means "advocates higher taxes."]

Larry Jacobs, a professor of political science at the University of Minnesota, wisely notes, however, that we can't yet know how significantly the state has changed until we know what happens with the budget. Here's the key question to ask at the end of the year: did the state rely more on tax increases, or budget cuts to meet its deficit?(Thanks to Geitner Simmons, via InstaPundit, for these links). (permalink)

Is Minnesota Retreating from the Welfare State? Part 1
Is Minnesota backing off from a soak-the-rich tax system, a cradle-to-grave social services system, and a culture that equate civic mindedness with high taxes? I certainly hope so--when I moved here from Illinois, my state income tax withholding went up 60 percent. Or maybe it was "only" 30 percent. It's too depressing; I've forgotten about it.

The political atmosphere, of course, is with the looming deficit in the state budget, estimated at $4.2 billion---this for a state of roughly 5 million people. (In case you are keeping track, that's $800 per person.) As it stands now, the Tax Foundation calculates that Minnesota is already the third most heavily-taxed state, behind only Maine and New York. (The average rank for states that border Minnesota: 23).

Writing for the Wall Street Journal, John Fund think that "Compassionate conservatism may be about to get the upper hand over old-fashioned progressive politics in one of the nation's original welfare states." At least it's a start in the right direction. While even Republican ex-governors call on Gov. Tim Pawlenty to raise taxes--again--Fund says that " Mr. Pawlenty is, to paraphrase Margaret Thatcher, not for turning."

The governor's budget calls for a 5 percent increase in state spending. That's generous, at a time when inflation is practically non-existant. The "soak the rich" Democratic party wants more, of course. But as Michael Greve notes (see preceding entry for the link), this is exactly the time for states--Minnesota, especially--to make necessary reforms. (permalink)

State Budget Deficits-Whose Fault is It Anyway?
State governments across the country are dealing with huge budget deficits, both current ($30 billion for this fiscal year) and projected ($80 billion for the next fiscal year). Many governors demand more federal money, claiming that the problem stems from unfunded mandates from Washington.

Michael S. Greve, a scholar with the American Enterprise Institute, agrees that there is need for federal action, but he doesn't call for more money. Rather, he calls for a reform in the way that federal dollars flow to the states. A brief review cannot do justice to this essay, which covers not only budget policy but federalism, education, and health care policy. But here are a few points that stuck out:

Since World War II, the role of federal spending in the national economy has been stagnant, at about 17 percent of Gross Domestic Product. State spending, however, as doubled, from 5 percent to 10 percent.

How did this happen? Through what governors are asking more money for even now -- joint federal/state programs such as Medicaid. "Federal funding of state-administered programs," Greve writes, "permanently inflates the demand for government."

State politicians like to please constituents and interest groups by expanding government programs--that's the old "buy your voters" technique. In the case of federal/state programs, the feds match state spending. So if a state spends $1 on Medicaid, it gets $1 (or even more) from the federal treasury. The state politicos get to satisfy demands for increased spending, but they can shift some of the responsibility onto the federal tax system: increase overall state programs by 100 percent, for example, but increase the demands on the state budget by only 50 percent. A smart move for state politicians? Certainly. Who can resist a 2-for-1 sale?

In the states, though, the political process that reconciles the demands of taxpayers, who want lower taxes, with those on the dole--program beneficiaries, administrators, consultants, and assorted technocrats--who want higher spending--is distorted by the federal funds. By design, federal matches result in states spending more on, say, Medicaid, than they would have otherwise. With money coming from Uncle Sam, expanding a state program doesn't seem as costly after all. By spending another $100 on Medicaid, the flow of money to those on the dole increases by $200.

When hard times come, however, watch out. If the state cuts its $100 share, it loses the $100 in federal money, and a $200 cut to a program sounds a lot worse than a $100 one. It also affects more people--people who have a very strong interest in seeing the deficit by increasing taxes, preferably on somebody else. Joe Taxpayer, on the other hand, might save a few bucks from cutting taxes (rather than spending in one particular program), so he is not going to be as motivated about making his views known. So guess which policy option--increased taxes or decreased spending--wins out over time?

Greve has some specific recommendations about education and Medicaid, which are worth the time of anyone interested in those issues.

Labels: Medicaid

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Freedom of Association Will Play Through at Colonial
On May 19th, Annika Sorenstam will be the first woman since the legandary Babe Zaharias to play in a tournament with men. Sorenstam, a phenom on the LPGA, will participate in the Bank of Colonial Colonial tournament, an event on the men's PGA Tour. A woman in a man's tournament? As you can expect, this has caused a lot of controversy.

Sportswriter Melanie Hauser has some good thoughts in a an op-ed on the subject.

Some players grumble that Sorenstam has not played in any of the qualifying tournaments for this tournament. Instead she will be there courtesy of a sponsor's exemption. These exemptions are granted at most, if not all, tournaments, so the criticism is overblown: what is unusual in this case is that the sponsored player is a woman. Actually, there are seven other players (all men) who will receive an exemption as well.

The cause of women in golf, then, is being advanced by commercial interests, not through a lawsuit, or a small group of protestors storming the gates. Bank of America may indeed be a progressive organization, but one can't help but admire their business acumen: giving a sponsor's exemption to Sorenstam is a sure-fire way to attract attention to an event that is, after all, not a major tournament. More public interest in the Colonial means more marketing opportunities for B of A.

Some of the men grumble, though in an age of political correctness and "diversity", nearly all the dissenters have kept their mouths shut. Of course, if they feel strongly enough about the issue, they always drop out of the event. It's an easy bet that none will. The stakes of winning--and the criticism they would face for withdrawing--all but guarantee it.

Rather than lobbying a government agency to regulate the PGA Tour, or sue the Tour for the "right" to enter, Sorenstam, who wants to test her mettle against the best golfers in the world, relied on the self-interest of Bank of America and of the Tour (which depends, of course, on sponors such as B of A). No regulatory dictat. No judicial decision. Just the free free market, and freedom of association at work.

Too bad we don't rely on that path much anymore.

Labels: Golf

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News is Entertainment. Better citizenry through talk radio.
Much has been made of the fact that a reporter at the New York Times committed frequent acts of plagarism and fraud. For the editors, the question is "what did they know, and when did they know it?" Unavoidable as well is the suggestion that the paper's enthusiastic embrace of affirmative action led senior staff to ignore the warnings of a junior manager. The Times, whose editorial page of late has shown a distinct break from reality, suffers another blow.

Meanwhile, a comic (Jay Leno) and a journalist (Katie Couric) trade places, and host each others show. Is this a scandal for journalism? Probably not. I've never thought of The Today Show as a serious journalistic enterprise, what with all its "lifestyle" stories and interviews of celebrities--and the fact that its hosts are celebrities in their own rights. By contrast, monologues from The Tonight Show are a major source of political news for many people. Entertainment as news. News as entertainment. This exercise in swap-o-rama merely confirms the obvious.

Liberals and centrists like to worry about "right-wing talk radio." Does it dominate the airwaves? Not quite. There is, after all, an extensive "left-wing talk radio" network, though most people don't think about it that way. What is this left-wing talk radio? Why, National Public Radio. Unlike CBS, ABC, CBS, etc., this one is supported by your tax dollars.

One other note on talk radio. The most intelligent and certainly most educated talk radio host in the country is Milt Rosenberg. This month marks his 30th year with "Extension 720" on WGN-AM, Chicago. Rosenberg, a professor of psychology at the University of Chicago, has the quiet demeanor of an old school professor, and he skillfully conducts serious interviews of serious guests, discussing serious subjects. Though I frequently listened in while I was living in Chicagoland, I was always amazed that I could listen to a discussion of, say, the Peloponnesian War or language and human cognition on a radio show. Think of Extension 720 as NPR, only better, and without the taxpayer funding. If even this superstation can't reach you over the air, you can listen through the WGN web site. (permalink)

Checker Finn on Education
One of the country's finest experts on education, Checker Finn, spoke at a luncheon today. For someone who writes and speaks on a subject usually discussed in tones either earnest and uptight (reduce class size! it's for the children!) or dull and inpenetrable (usually beyond parody), Finn gives a fantastic speech, full of insight and humor. Come to think of it, those two qualities are usally lacking in the literature on education.

One point worth relaying was one his observations on the commission that produced the famous report "America at Risk," which detailed the sad state of government-owned schooling. To paraphrase, he said "The members of the commission were naive, thinking that the will for change was there, the only thing missing was the knowledge of where to go." Of course, it's more the other way around these days. We know what works: highly educated teachers. High expectations of students. What we lack is not knowledge but political will: the "education blob" resists raising academic standards of would-be teachers to make sure they actually know what to teach, and not just the latest fads in pedagogy. The blob also resists the usual practice of business, which is to reward high achievers (merit pay) and punish slackers (at-will employment).

When asked about the usefulness of small classes ("class size reduction," in the jargon), Finn replied that the evidence was mixed. However, paraphrasing again, "If you're a lousy teacher with a large class, you'll still be a lousy teacher with a small class."

Finally, he laid out the two different ways of education reform: market reform (using financial incentives to reward success and punish failure--think vouchers and tax credits) and standards (increase annual testing of students and perhaps teachers, but keep the funding system as it is). Finn suggested that these two approaches can be combined: use vouchers to provide more choices, especially to the poor, and implement a strong testing system, so people can know what schools are doing best.

Great idea. But don't we already get that information from graduation rates and college entrance exam scores?

Labels: Education

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School Boards: Part of the Problem
Teacher union opposition to vouchers and tax credits is well-known. Opposition from union bosses is understandable--if students leave government-owned (public) schools, they usually do so for schools (private, or home schools) that are non-unionized. Union bosses lose members, which means they lose money and power. Who wants to do that?

But as this news report from the Associated Press points out, there's another opponent of vouchers: members of the school boards. From the news story:

"There is no middle ground on vouchers," said Freddie Whitford, executive director of the Louisiana School Boards Association and a voucher opponent."

The same logic that applies to the bosses of teacher unions applies to Whitford, of course: a decline in the budgets of public schools would undermine his own organization. But I suspect there's more at work than that. Too often, school board members, if not already in the pocket of teacher unions when they are elected (unions are working vigorously to get pro-union individuals elected to school boards), they become captured by the culture and logic of the very people--the teachers union--they are supposed to manage. It's something like the Stockholm Syndrome, in which hostages come to endorse the cause of their captors. But the analogy is imperfect: while school board members may be indoctrinated by the unions, the true hostages are the low-income families who cannot easily escape from the government-owned schools that allegedly teach their children.

Labels: Education

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Higher Expectations and Prices for Higher Education
Education, after health care spending, is usually the largest budget item for most states. While there are plenty of ideas floating around for reforming K-12 education, ranging from (on the status quo-side) fiddling with funding formulas and increased testing of students to (on the more dramatic side) tuition tax credits or vouchers that families can use at any school, higher education has, by and large, escaped public scrutiny. Sure, the folks at the American Council of Trustees and Alumni and the National Association of Scholars have turned up the heat on political correctness and the weakening (dare we say abandoning?) of academic standards, the basic structure of higher education, with its heavy reliance on state-run universities, has largely gone unchallenged. At least in my own state, the behemoth university is lionized as an engine of economic growth and cultural creativity.

It's about time that the sacred cow receive a little scrutiny, because recent events are reason enough to wonder "what are we thinking?" On April 11, 2003, the Wall Street Journal published "Education: College, With All the Perks--Schools Try Free Phones, Cable." College isn't necessarily the spartan life of communal showers, 20-year old thin mattresses on ugly wooden built-in furniture, and black, rotary dial telephones (one per room) that I knew not that long ago. Colleges and universities are offering cellular phones, cable tv and high speed internet access in each dorm room, laptop computers, and other niceties. Some, like internet access, can be useful tools for academic research--as well as for downloading gigabits of illegally-obtained music. Others features are of a much more dubious nature.

In its April 18 edition, then, the Journal reports that "Schools Trim State Ties." State aid to colleges has almost tripled during the last 20 years, but university budgets have increased even more. The result is that state funds are accounting for a smaller percentage of state funding, ranging from 25 percent at the University of Wisconsin to just 10 percent at the University of Michigan. Universities are increasingly turning to full-priced students from out of state and private funds for research centers.

University officials are calling for more independence over fees and salaries. Some are even using market mechanisms, charging higher tuition for high-demand fields such as engineering, and less for lower-demand fields such as liberal arts. Good for them--if they can continue down this path and accept more serious reform.

More serious reform is what a proposal in the Colorado House of Representatives envisions. It would drop annual appropriations to the state's colleges and universities, and give students a tuition voucher. In other words, shift the funding mechanism from institutions to students. That's a good idea, for several reasons. It would make universities more aware of competition--something sorely needed in the last bastion of American socialism. By tying all (or nearly all) state budget allocations to the backs of students, universities would have to watch over their budget with an eye to the market (of students) rather than rely on the patronage of a a well-positioned alumnus in the legislature.

Would this, however, mean that we would see even cushier student unions and 5-star accomodations in university dorms as colleges rush to meet the demands of today's students? Initially, perhaps---until students realize that they will rack up less debt at universities with more pedestrian surroundings.

Labels: Education

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Farewell to Fallen Soldiers
While the war in Iraq has, blessedly, been relatively free of casualties, as far as large-scale wars go, the unique, God-given dignity of each person means that even a "small" number of deaths has significance. In the Weekly Standard, Matt Labash describes the hardest job in the military: soliders who prepare the bodies of fallen brothers-in-arms for burial. Given the subject, it's no surprise that this is a hard read. Labash describes the operations at a camp Kuwait, and tells about his interviews with mortuary specialists at Dover Air Force Base, Delaware.

The story is notable for several reasons, including the reminder that the military is at heart a bureaucracy: "The dead leave this military life just as they came in: in a blizzard of paperwork."

But before you think this story turns into a mere exercise in black humor and cynicism, read on and find the amazing respect that these specialists have for the dead--including driving a hearse from Delaware to Vermont to provide a grieving family with the soonest possible arrival of the remains of their loved one, and tending to Iraqi war dead.

Mortuary specialists see not only the physical truma of death, and combat death at that; they also must deal with personal effects such as photos that bring a reminder--as if one was needed--that each combat death affects someone back home.

"Over the last two months, each [specialist] has made memories he'll never be able to shake. For one soldier, it was reading the helmet graffiti of a fallen Marine, which said: 'I fight, so you don't have to.'" It's hard to get a more concise statement of the role of the solider.

There are many points worth considering in this essay, too many to list here. I will close with the remarks of one solider, who captures the unusual and sacred role he finds himself in:

"Have I cried and shed tears out here? Yes I have. Many nights. But I've already said that regardless of what I see, I'm not going to stop working. Because I'm still here. My family has the privilege of still having me. The other family members of these service members that I'm seeing don't have that. It's not going to be possible, you understand? Some of them are just not going to be able to be seen. And I'm the one that has the final image of them--me." (permalink)

Maybe the Realists Are Right?
The study (and practice) of foreign relations has long been divided into "realists" and "idealists." Long story short, idealists (who can be, on political matters, liberals--think Truman, or conservative--think Reagan and perhaps George W. Bush) think that the type of government a country has makes a difference in its foreign policy. "Democracies don't fight each other" may be a shorthand for this way of thinking. Realists, on the other hand (think Henry Kissinger, George H.W. Bush and in the academic world, Kenneth Waltz) argue that the type of regime doesn't matter: in a dog-eat-dog world in which power is a zero-sum game, even democracies will be at odds with each other.

I have been sympathetic to the idealist side of this divide, even though some of its proponents emphasize freedom-limiting international institutions such as the European Union or the UN as a way to build a common culture. Reagan showed that you can believe that democratization is peaceful without submitting national perogatives to an international body.

The reaction of France, Germany (both democracies), Russia, and various hangers-on, all strain the idealist hypothesis--though not to the point of war among democracies. The opposition of these countries to a US-lead war in Iraq is well-known. Realists would point to growing evidence of French and Russian commercial ties to Iraq and say "we told you so; national interest and the pursuit of power trump ideology."

Now we have the absurdity of the U.S. pleading at the UN to end sanctions. Hello? Sanctions that were imposed on a particular regime, the regime no longer exists, and there is even a debate on whether sanctions should be ended? Yup. It comes down to the French, Germans, Russians, et al. wanting to use the mechanism of the UN to limit the prestige, reputation, authority, and power of the U.S. Score one for the Realists. (permalink)

The Unreality of Pacifism
Talk about fighting the last war .... As I drove through southern Minneapolis this afternoon, I saw many yard signs that read "Say No to War on Iraq." Due to various legal niceties, President Bush has not yet declared victory, but ... the war is over. Even so, some people still think there is a need to protest the war. Maybe it's just the latest installment in identity politics.

In some jurisdictions, political campaign signs must come down within a certain number of days (typically, 30) of an election. Maybe we should apply a similar law to pro- and anti-war signs.

Some of the signs I saw had a smaller sign attached to them .... "Build Peace Among People." Uhm, sure, right. Let's think good thoughts of the Iraqi people, they can think good thoughts of Americans, and there will be peace.

Pacifists are sometimes want to say that "peace" is more than the mere absense of war, but some state of harmonious human relations, widespread self-actualization, and the ability of each person to achieve inner tranquality. Fine. And how exactly was that going to happen in Iraq with the thuggish regime of Hussein in place? And how was that going to happen in this country if the old regime was, as the Bush administration claims, providing aid and comfort to terrorists who want to attack the US?

The late Michael Kelly, who died in an accident while with U.S. troops in Iraq, captured the costs of "peace" quite well in one of his last columns, titled "Immorality on the March." After predicting (accurately) a quick war that would save many more lives than it would take, he lays in a sharp attack on the "Give Peace a Chance" crowd: "To march against the war is not to give peace a chance. It is to give tyranny a chance. It is to give the Iraqi nuke a chance. It is to give the next terrorist mass murder a chance. It is to march for the furtherance of evil instead of the vanquishing of evil. This cannot be the moral position."

Certainly, bringing Hussein, or any tyrant, down, is not the key to human happiness. But taking the likes of him out removes a serious impediment to improving human life. It's hard to see how wishing him away through "building peace among people" is going to achieve that. Some guys just need a smackdown for the good of the rest of us.

IRONY ALERT: I posted the above entry and then went to review it from the public screen. This blog, like most blogs on blogger.com, has small advertisements inserted on the top of the screen. The ads are placed there by the owners of blogger.com; authors have no control over what ads appear on their pages. So what advertisement did I see after reviewing my entry on the foolishness of many of the peace protestors? Something for the "World Peace Newsletter." (permalink)

Who you calling conservative?
The taxonomy of political groups and leanings is a fascinating subject. Why? It can lead to so much conflict. Whether you're talking politics, religion, nationalism .... left or right, believer or infidel ... "Who is a true X?" is the subject of many a debate.

Now comes a blogger Michael Totten to characterizes conservatives and liberals as "defenders" and "builders," respectively. The latter focus on what could be, the former on preserving the good that exists. Mr. Totten raises some interesting points, especially on foreign policy.

But .... now we see a reversal of roles. As a libertarian-minded friend of mine said "Don't call me a conservative. Why would I want to conserve what we have now?"

He's got a point. There are many public policies that are not worth conserving, and the people often leading the charge to make changes to those policies are called ... conservatives.

In the U.S., we are leery of socialized medicine (with good reason). But we cheerily embrace socialized education for K-12 students (think about it: everyone in a school district pays taxes to one organization which buys education services for all. Consumers have no choice, at least as far as how the money they spend on taxes is to be spent.) We have a socialized retirement system (Social Security) that is imploding due to changing demographics and a faulty design. Health care for the elderly is socialized. We call it Medicare, and its financial condition is also a train wreck waiting to happen.

Socialized education, socialized retirement, and socialized health care. Which of these failing systems is worthy of the support of a conservative? None. That's why "conservatives," especially those who favor increased consumer sovereignty over and against government control, are leading the charge to reform--or even to "build" new ways of doing things, such as educational vouchers, personalized retirement accounts, and Medical Savings Accounts and consumer empowerment. And who defends the status quo? By and large, liberals!

So things aren't always what they seem.

Labels: School choice

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Cultural Relativism and the War on Iraq
The New York Time's columnist Thomas Friedman writes on the merits of the war on Iraq, and readers to the Times disagree. The American Spectator's Wlady Pleszczynski has this take:

Perhaps most revealing is what letter writer number four notes with a deep frown on his face, I'm sure: that "the world should brace for the possibility that disarming Saddam Hussein was never the primary reason for invading Iraq, but rather a pretext for deposing an anti-Western regime and remaking the politics of the Arab region." Think the world is strong enough to face such a shocking possibility? Now it's one thing to think such a project is more than the U.S. can handle in a hopelessly unstable region. But the good liberal apparently thinks it's simply criminal to think of getting rid of any regime hostile to the West.

And then it hit me (again): the "peace" movement is yet another illness borne by cultural relativism. Oh for the days of liberals who wanted to defend liberalism. (permalink)

Those who do not learn the lessons from history ...
This photo from a peace protest proclaims a demand for "Peace in Our Time." Is this placard the result of a doctored photo, the prank of a counter-protestor, or simply public education as we know it? (permalink)