Medical Savings Accounts--Worthwhile or Worthless?
The Des Moines Register disses Medical Savings Accounts, saying they will lead people to deny themselves important medical services and fatten the coffers of the wealthy. David Hogberg takes on these criticisms in his Cornfield Corner. Here's a sample of the Register's thinking: The idea that, in general, people spend their own money more carefully than they do other people’s money must be right out of fantasyland. Contrariwise, it is hard-headed reality to think that keeping a system in which people perceive that someone else is paying the bill will hold down costs. (permalink)

Psychology of Liberalism
I've still got that Berkeley study of the psychology of conservatism, and plan to ... sometime ... get to it. Meanwhile, Ben Stein does a quick take on the psychology of what is today called liberalism. In brief, conservatives are risk-takers (entrepreneurs, willing to strike out on their own and take responsibility for their economic well-being); liberals are risk-adverse (regulators, wanting a government rule for a lot of things). Cheap, perhaps, but it could be as good as the Berkeley study. (permalink)

I Pledge Allegiance to Diversity, and to Multiculturalism, for Which it Stands
Speaking of the essay questions required by the University of Michigan's new "diversity-based" admissions program (see yesterday's posts), Roger Clegg nails it. He tells the Free Press "I'm afraid this is going to amount to a requirement that a student either write an essay that talks about how he has the right skin color, or that he write an essay that amounts to a pledge of allegiance to diversity." (permalink)

Summertime Blues
A proposed law in Michigan would force school districts to start the school year after Labor Day. Some schools have started classes already, which strikes me as just plain wrong. Admittedly, the starting date is arbitrary, and the school calendar is obsolete, based on an economy that just doesn't exist anymore. The Free Press reports that schools have added more hours and days to their calendars, which may be causing the pre-Labor Day openings. Now, if the schools spent their time on academics and not on drivers training, wrapping cucumbers with condoms, promoting "diversity and sensitivity" and so forth, they may actually have time to get everything done without bumping up against the traditional end of summer. (permalink)

Taxpayers: You're Too Stupid to Raise Tax Rates on Yourselves
John Fund, of the Wall Street Journal, profiles the tax-reform-and-hike proposal of Alabama's governor, Bob Riley. Riley, a Republican, has gotten noteriety for his Nixon-to-China embrace of higher taxes, and justifying it by appealing to the Bible.

Fund discusses the political winds in the state (Democratic leaders in favor of the hike, blacks fearful of getting ripped off once again, and Republican leaders voting narrow to oppose the plan). He quotes one of Riley's aides, who said that the people opposed to the package were "too damned stupid to know better."

Among other things, the proposal would eliminate the deduction for federal income taxes, and impose (or perhaps it's merely increase, I'm not sure) the progressive income tax. It's all "for the children," you understand, but there is no guarantee that the money will go to government-controlled schooling (Riley's latest object of concern), or even then, that it will be well-spent. (permalink)

Observations from the Minnesota State Fair
This morning I went to the Minnesota State Fair to help man a literature booth as a favor to the Minnesota Taxpayers League. A few observations:

CAPITALISM LIVES. This was evident, of course, in the various and sundry peddlers who were hawking warm winter clothing, hunting blinds, jewelry, furniture, and two dozen varieties of "food on a stick." I found it in a more unusual place: the Green Party was selling buttons, for $1 each. At our booth, on the other hand, we were handing buttons -- "I am a taxpayer watchdog"--gratis.

DON'T CONFUSE ME WITH THE FACTS. One of our displays showed that the top 5 employers in Minnesota had gone from industrial stalwarts (Honeywell, 3M, etc.) to various levels of government (state government, federal government, etc.) For one passer-by, that was just too much. "State government? No way." I gave her a puzzled look, as if to say "Oh? Why do you say that? What about this chart do you dispute?" She continued: "I work for the state." Oh sure. That settles that!

DON'T TAX ME. TAX THAT GUY. One man muttered that it was wrong to have balanced the recent budget without raising rates on the top 5 percent of taxpayers. Easy for him to say, I thought. Tax someone else. Of course, if he thinks that the state does need more money, he can always donate money.

CONGRESSIONAL PLOY BACKFIRES. A staffer for Senator Mark Dayton (Democrat) was collecting signatures in support a proposal to "make the prescription drug benefits that Congress gets equal to that received by people on Medicare." Of course, it's a ploy; there is no prescription drug benefit in Medicare, and the call has a populist ring to it.

Despite the fact that it was going to be a fool's errand, I talked with the staffer. I told her that it would be great of people had the same health benefits as Congress--if the Federal Employees Health Benefit Program (FEHBP) was used as a model. I asked what Dayton thought of that. Naturally, the staffer averred that the senator hadn't taken a position on that. Or something. The FEHBP isn't perfect, but it does use a dose of competition among insurance providers--something that would greatly benefit Medicare, something that would make the inclusion of a drug benefit sustainable, even worthwhile.

Labels: Health care

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U of Michigan Imposes Political Test on Applicants
Bring back quotas!

I'm beginning to think I prefer race-based quotas (so many black, so many white, so many hispanic) over what the Supreme Court's Bollinger decision left us with.

Why? Because as odious (and unconstitutional) as that approach was, at least it was impersonal; it did not require individuals to give fealty to the idol of "diversity."

According to the Chicago Tribune [registration required], the University of Michigan will require undergraduate applicants to answer one of the following questions:

1. At the University of Michigan, we are committed to building an academically superb and widely diverse educational community. What would you as an individual bring to our campus community?

2. Describe an experience you've had where cultural diversity--or a lack thereof--has made a difference to you.

At least a quota system does not require the applicant to pontificate about the bloviation and fraud that is "diversity." By making 'diversity' part of the application process, the U is stating that it is more important than education.

Woe so the applicant who says "I am a sheltered child with little experience beyond my own family. But I want to attend university to study great ideas, studied by all people regardless of their race." The analogy is overwrought, perhaps, but this reminds me of a country in which would-be students must speak a word of praise in favor of the Beloved Leader, or the Glorious Revolution, or what have you.

The idea of liberal arts has been corrupted. Instead of opening up minds, Michigan is trying to shape them. That's not education; it's indoctrination. (permalink)

No Surprise Here: Catholic Schools Shine
From this Chicago Sun-Times: "Students in Roman Catholic schools in the Chicago area tend to make better gains on test scores over four years than the average public and private school students, national test data released Wednesday show." As the paper points out, this system includes 83 "high poverty schools." This gives lie to the notion that poverty and poor academic performance need go hand in hand. (permalink)

Economies of Scale?
Cicero, Ill, has something else to add to it public image (no, not another politician with alleged mob ties): Illinois' largest junior high school building. The new campus has a capacity of 4,000 students. (That's roughly three times the enrollment of my college!). The Sun-Times notes all the gee-whiz features of the school (computer labs, new gyms, etc.), but says "there are downsides. At a time when large high schools are breaking into small ones and the push is for more intimate learning settings, Unity is out of place." While the benefits of small class size are oversold, what is overlooked these days are the potential benefits of small schools,, which may actually be, contrary to intuition, cost-effective. (permalink)

Courage is Just Another Word for "Raising Taxes"
Writing in The American Spectator, David Hogberg takes on the mainsteam media line--espoused most recently by David Broder--that "courageous" politicians are the ones who raise taxes. Hogberg criticizes two Republican governors in the south (Alabama and South Carolina) for plumping for tax increases.

"Courage" is a word usually applied, in political circles, to Republicans--like Riley in Alabama and Sanford, in Carolina--who turn away from the party's anti-tax line. It ought to be applied, though, to Democrats, such as Michigan's Jennifer Granholm--who hold the line on tax increases, even as their public union constituencies ask for more.

We need a few more examples of "courage," including politicians who are willing to try new approaches (tuition tax credits, competitive bidding for government services between state employees and outside vendors, etc.) rather than simply raise tax rates or make spending cuts while leaving existing structures untouched. (permalink)

Helmet Laws, No; Helmet Use as a Factor in Damages, Yes
Wisconsin does not have a mandatory helmet use law for motorcyclists. Currently, insurance companies are free to sway juries to reduce damage awards if the biker is not wearing a helmet. A proposed law would change that.

A personal injury attorney representing some bikers says "If there is no law requiring a helmet, there shouldn't be a penalty for not wearing a helmet."

Wrong. Bikers ought to be free to not wear helmets if they like. It's a matter of personal freedom. But they should also be subject to receiving reduced compensation after a crash if they weren't wearing a helmet, if by so doing they increased their injuries. It's a matter of personal responsibility. (permalink)

SAT Scores Rise. But does this mean anything?
Nationally, scores on the SAT are up; but the Center for Education Reform warns that the test has been dumbed-down (in addition to being re-normed), so the news isn't as good as it may appear to be. (permalink)

Coming to the Salvation Army: Medical Care for the Homeless
A new federal grant initiative will put medical staff in place at Salvation Army soup kitchens and other social service groups serving the homeless.

Beats having them wait until problems are so severe that they use high-cost emergency room services, I suppose. (permalink)

Suburban Tax Bills Soar
Property taxes in many suburban Chicago communities are going to soar this fall--12 percent in La Grange, 19 percent in Flossmor, and 33 percent in Oak Park township, for example.

The raise follows increases in property values, so property owners ought to have some consolation--they're wealthier on paper. But the increase in property values has little, if any, bearing on the actual needs of the communities for government services. So why are governments getting an automatic tax increase, without demonstrating the need for increased revenue? Sounds like the 'burbs could use a spending cap. (permalink)

Federal Rules, State Budget Snafus Could Derail Real Estate Sales in Illinois
The Daily Herald reports that real estate transactions in Illinois could come to a screeching halt at the end of September?

Why?

Real estate transactions usually involve appraisers, and appraisers must get a license from the state. Their licenses all expire at the end of September. State officials want to raise the fee that appraisers pay (currently $450 for two years) but haven't figured out what to charge.

Two questions: Why are all licenses due at the same time? Wouldn't it make more sense to space them out, as with drivers licenses? And what's the federal involvement? As the Daily Herald puts it, " federal regulations require all real estate lending to involve licensed appraisers."

Most real estate transactions, especially home sales, involve two parties in the same state. The involvement of the feds is stretching the interstate commerce clause. I suspect the real "hook" for federal involvement is not the fact that the parties may sometimes come from two different states, but because most home mortages will involve, at some time or another, the quasi-official Fannie Mae, a federally-chartered organization.

Yes, there are other areas of federal involvement in real estate transactions-fair housing laws and REPSA come to mind--but it's still a stunning example of federal overreach to have Uncle Sam involved in a sale of that three-bedroom ranch on Elm Street in Anytown, USA. (permalink)

Tax Reform on the Ballot in Maine
Maine, the highest-taxed state in the country (when you look only at state and local taxes) will have several tax reform proposals on the ballot this fall. The Portland Press has a series of articles on the subject. (permalink)

A Cut is Not a Cut
Illinois' Gov. Rod Blagojevich had me fooled last week. I thought that he cut $6.8 million from the budget of the Abraham Lincoln library.

As it turns out, the money has already been spent. According to The State-Journal register, a spokesman for the governor "is trying to find a way to report budget figures that more accurately represent the condition of the state’s finances. The result in the case of the library is the appearance of a cut. The change has absolutely no effect on actual spending on the presidential library or the associated museum."

So next time you hear whining about budget cuts, look more closely. They may not be there after all. (permalink)

Want to Volunteer? Tough Luck, says Union
Milwaukee County, Wisconsin, has a budget deficit of $7.8 million. County Executive Scott Walker has ordered up a plan that eliminates 280 jobs, many of them (114) in the parks department.

So would you think that this might be a good time for some old-fashioned community spirit, some come-together volunteer work to pick up trash, paint the picnic tables, and so forth?

No way, says the union that represents the park employees. "I better not see a volunteer in those parks," Christopher Pegelow, president of AFSCME Local 882. (permalink)

Michigan Governor Vetoes Mackinac Bridge Proposal
Michigan's governor, Jennifer Granholm, vetoed a series of bills that would have folded the bridge's costs--currently paid for by user fees (tolls)--into the general transportation budget for the state. Thorugh the Detroit Free Press headline said that New Funds for Mackinac Bridge fixes rejected, Granholm did the right thing. Transportation planners ought to make greater use of tolls and new tolling technology; as the only road over a four mile span of Great Lakes waters, the "Mighty Mac" bridge is an obvious case for tolls.

Labels: Transportation

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Maine Goes to "Universal Health Care"
Maine may have a lot of people of French ancestry, but it's decided on a British approach--socialized medicine. (I suppose that's the French approach, too, but that's another day.) In a massive cross-subsidization scheme--I am taxed to give money to you, you are taxed to give money to me--families of four with a household income of up to $55,000 (a decent sum in Maine) can get subsidies--courtesy of other taxpayers--for the purchase of health insurance. At least they can use it to buy private insurance--though the state is slowly in the process of squeezing insurance companies out of the market through regulations. (See commentaries over at the Maine Institute for Public Policy)

In an interview with stateline, new Governor Baldacci gets it all wrong when he argues that a lack of "universal health care" is a competitive disadvantage on a global scale. Rather, it's an advantage to not have government mucking up the works. Of course, government is plenty involved as it is here, but not as much as it could be.

Labels: Health care

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WSJ Weighs in on the "Jesus Told me to Raise Your Taxes" Campaign
Today's WSJ features an editorial, "What Would Jesus Tax?", on the effort of Alaba>ma Governor Bob Riley to raise taxes by $1.2 billion. Among the points made by the Journal (article by subscription only):

• The current budget deficit is $675 million, meaning that the tax increase is nearly double what is required to fill the gap.


• The $1.2 billion increase would be eight times larger than any previous increase in the tax.


• In March, Riley said "I will not entertain the idea of additional taxes until we reform the policies and practices that have created the problems we face today." A mere one month later, he issued his proposal.


• Riley appeals to the golden rule--love thy neighbor as they self--which is as good as it goes. But he goes beyond that to say that it requires a tax increase. (At its best, government can show justice. It cannot show love.)


• Households with the lowest incomes (under $30,000) are most likely to oppose the plan.


• While Moore wants to make the tax code more "progressive" (the test of justice for the liberal), the top 50 percent of taxpayers already pay 96 percent of the taxes


• The trouble with the state has not been a dearth of taxes; they rose by 6.5 percent a year since 1994, even as the economy grew by only 4.9 percent a year.

What's interesting about Riley's plan is that it is wrong on so many levels.
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Pink Pistols
The Detroit Free Press says that a Michigan chapter of the Pink Pistols is being formed. The group of homosexuals who embrace gun rights has gotten other gay groups bothered--one leader, for example, says "I would hope that would lead the discussion and debate in favor of gun control." (I find it amusing to watch internal dissension work its way through pressure groups.) The Freep found one gun-rights advocate who thinks it's all a publicity stunt. But to paraphrase another, "the more the merrier." (permalink)

Rank Has Its Privileges
According to a report in the Chicago Sun-Times, the recently retired superintendent of a school district in Palatine, Ill, got $353,351. This includes over $70,000 in unpaid sick days, a benefit not even, to my recollection, available to federal government employees hired since 1980 or so. John Conyers, now 57, will now get $130,000 a year in a state-paid pension.

And opponents of school vouchers say that people shoudn't profit off of education.

Labels: Public employee pensions

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Nursing Homes: A $63 Billion Taxpayer Program
Between Medicare (a federal program for people over 65) and Medicaid (a federal/state program for low-income and specified other people), taxpayer funds paid $63 billion for nursing home care in 2002. (To put that into perspective, that's roughly 20 percent of the Defense Department budget).

The feds has launched a "Nursing Home Quality Initiative" aimed at promoting pain management for nursing home resident. A report issued by the General Accounting Office in July says "the proportion of nursing homes with serious quality problems remains unacceptably high."

Labels: Medicaid

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Pity the Prosperous Cities
Of the several states in which I have lived, Illinois seems to be the one most given to politics as a game of patronage. No surprise there, I suppose.

But still, I took note of an article in Sunday's Daily Herald. Republicans in DuPage County, Illinois are down in the dumps since a Chicago Democrat took over the governor's mansion, and the county lost three of its officials in the state's highest elected offices (Republican leaders in the House and Senate, plus attorney general).

In surveying the benefits that came to the county during its years of being plugged into the highest offices, the Daily Herald says that "Millions of dollars were earmarked for local projects, too. State money was available for everything from roads to forest preserve land to a stained-glass window for a Naperville parking garage."

A stained glass window in a parking garage in Naperville. That encapsulates a lot of what's wrong with politics and policy in Illinois. You see, Naperville is one of the wealthiest cities in one of the wealthiest counties (DuPage) in the country. And the county is ruled by Republicans, whose only difference from Chicago Democrats, it appears, is the identity of those people who were on the receiving end of the shell game which takes from Peter, gives to Paul, and enriches Matthew (the government employee, or politician) along the way. If so, both parties deserve only contempt.

This same phenomenon occurs on the national level, too. Once I noticed a sign telling me that a bike trail in DuPage County was maintained, in part, with money from a Community Development Block Grant (from the federal HUD). Waitresses in Tennessee are standing for 8 or 9 hours at a time so that the lawyers, doctors, and corporate executives in DuPage county can have a pleasant place to exercise during the weekend. Amazing. (permalink)

A Review of "Chicago-Style" School Reform
In 1995, Richard M. Daley, mayor of Chicago, gained control over the Chicago Public Schools--or perhaps as much control as one person can get over a bureaucracy as large as the CPS. (He got the power, from the legislature, to appoint the school's board and CEO).

The students who were in first grade at the time have now made it to high school (if they haven't moved out, or more likely, dropped out), and the Chicago Sun-Times has a collection of articles devoted to the experiment in mayoral control. Among the findings:

• Reading scores improved dramatically. However, only 49 percent of students who entered the CPS in first grade made it through the eighth.


• Standards have meant something -- 6,550 students have had to repeat a grade. (There are, however, some who fret over this--apparently thinking that promoting incompetent students is the best way to promote education.)


• The Big Push has not been cheap: $3.6 billion in construction spending; nearly $100 million in summer classes; nearly $100 million in after-school classes. The total budget has gone from $2.7 billion to $4.8 billion.


• Of current eigth-graders, 57 percent read at or above "national norms," while the comparable number for math is 64 percent


• The reforms require students to reach at least the 24th percentile of standardized tests at the 3rd, 6th, and 8th grade levels in order to move to. This doesn't everyone, but not all mind. Says one student, "I like the pressure. It makes me do good. I know I need to pass, so I will.''


• Some students (one in four, in fact) have repeated one or more grades--and may have skipped a grade in the process, rejoining their peers. Repeating one grade may work, but some researchers warn that students held back two or more times are more unlikely to finish school at all.


• Students from families with middle-class incomes were 29 percent more likely than average to leave the schools before the eigth grade. Most left for public schools outside the city. This appears to have been the pre-Daley pattern, as well.

The record is mixed, though slightly encouraging. Daley has placed his political prestige on the line for improved government schools, and in a city built on patronage and a strong mayor, that's of some value. Still, there's a long way to go, and some measure of school choice should be tried as well.

Labels: School choice

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A Museum for Honest Abe
Governor Rod Blagojevich took some items out of Illinois' budget, including $6.8 million allocated to the Abraham Lincoln Presidential Library and Museum. The two-building complex is expected to come to $115 million. Springfield-area residents will pay for it three times--the project is funded by a combination of federal, state, and local taxes.

Though it's six years old by now, this item from the Christian Science Monitor gives a brief overview of the debate of whether taxpayers ought to fund presidential libraries. There weren't any such libraries until 1963. How did we ever get along without them? Yes, presidential papers should be preserved. But do we need a shrine to each president? (permalink)

Milwaukee County to Privatize Golf Courses, Parks
Scott Walker, executive of Milwaukee County, said he would make more use of private firms in managing county golf courses and park concessions.

Given the $52 million budget gap, Walker said, it made sense to make more use of private firms. Walker also fired the Parks Director, who presented him with a plan to cut costs by closing county swimming pools earlier than scheduled. In other words, she gave him the "hold the public hostage" approach, while Walker was trying to use new strategies. The Journal-Sentinel says that the parks director was dragging her feet on pursuing privatization opportunities.

Labels: Golf

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Economic Ignorance
Too often, public policy is made (or at least debated) in an atmosphere that ignores the basics of fiscal reality: "if it saves just one life, it's worth it" (even if doing so would take all the money spent on, say, fire protection?)

Lawrence Henry reviews some recent examples of ignorance (or is it demagoguery?) on matters fiscal. One newspaper story lamented the plight of a woman who obtained a home mortage from a "sub-prime" lender (that is, one that lends at higher-than-usual rates to not-quite-so-creditworthy customers). After paying $400 a month on the loan for 3 years, her balance had decreased by only $500.

I'm shocked, I tell you. Shocked, that this sort of things happens in America. Such mistreatment. Such outrage. Such ... Oh wait. As Henry reminds us, anytime you take out a mortage, the first years will do little to pay down the principal--doesn't matter whether your lender is "sub-prime" or not.

"Did anyone at the Eagle-Trib (ordinarily a good paper)," Henry asks, "think to do a spreadsheet on a 20-, 25-, or 30-year loan? Or to plug the words "mortgage calculator" into Google? No matter what the interest rate, in the first years of a long-term loan, payments work that way." But then there would be no story. (permalink)

Laboring Over the Obvious
The Wisconsin legislature got into a shouting match over the question "What is marriage?" Under Wisconsin law, marriage is a contract between a husband and wife. Proposed legislation would define marriage as a contract between a man and a woman.

One legislator, according to the Journal-Sentinel, "said no court in the state's 155-year history has construed a husband to be anything but a man and a wife to be anything but a woman."

So you'd think he might oppose the measure as unnecessary, or perhaps endorse it? Think again. Instead, Tim Carpenter (D-Milwaukee) said that the bill is "about bigotry, about hatred." (permalink)

A Limit to Term Limits?
In 1992, 58 percent of all Michigan voters approved term limits on the legislature, governor, attorney general, and secretary of state. Now, the Detroit News finds "Sentiment is growing in Michigan to try to overturn voter-imposed term limits and allow lawmakers to stay in office longer."

Just one problem: the "sentiment" the News found lies largely in the legislature. Of course. It's not a bad job, if you can get it. Why wouldn't they want to stay in office?

This is a good time to review a Cato Institute study (PDF format) of the issue, which found that term limits:

• Stimulate electoral competition


• Promote non-traditional (especially minority) candidates, who are otherwise shut out


• Have not, contrary to claims of opponents, strengthened the role of the bureaucracy, legislative staff, or lobbyists


• Tend to lead to more sound public policy

Seventeeen states, with a population over 100 million (roughly one-third of the U.S.) have term limits for state officials. (permalink)

Fraud, Waste, and Abuse in Public Schools: Taxpayers Foot Bill for Palm Springs Golf
The Detroit Free Press is all over the Oakland (Mich.) Intermediate School District this morning for the way in which officials travelled well on the taxpayer dime. "A Free Press review of expense records," the paper said, "found a freewheeling environment with few controls over spending on travel, meals and gifts in a district that serves special education and vocational students. At the ame time, the Freep notes, special education students had to wait in line for some services.

In addition to conference stays at plush hotels, district personnel travelled to France, Germany, Poland, and other countries, as well as tourist traps such as Las Vegas in this country.

Further, "employees bought sweaters, handheld organizers, pillows, wallets, beach chairs, candy, silk flowers, plants, potpourri, candles, a vacuum, crystal, jewelry and movie videos, often listing the purchases as training or school improvement supplies. "

A lobbyist for the district (yes, taxpayer funds go to support a man whose job is to ... ask for more taxpayer funds) was reimbursed for $166.50 he says he spent on a meal. That's bad enough. Except he lied--the money wasn't for a meal, but for two rounds of golf in Palm Springs, Calif.

I have thismuch sympathy for the people criticized for the trips to fancy hotels. Conferences are often held at such hotels, and it's simply much easier, and more logical, to spend the night in the same hotel as the conference. And if the meeting is going to be in a downtown district where the choices are dominated by high-priced hotels, you're probably not going to find a Motel 6 or even a Hampton Inn. (I attend conferences where I end up paying what I think is an obscene amount of money on a hotel stay, because that's where the people I want to do business with are going to be staying.)

But government is not business. Yet government officials sometimes try to justify their expensive ways by appealing to business tactics. Said the golf-loving lobbyist, "The public might not like an $80 tram ride, but you have to look at it as an investment in bringing the money back into the district," said Whiston, who is paid about $92,000 a year. "I've always said this will never look good on the front page, but I'm hoping that they'll look at the total picture. It's a very competitive business."

True enough. But he is not in a competitive business. He works for a monopoly enterprise that is guaranteed the enrollment of students from a certain geographic area. And he doesn't have to earn the trust of customers. Or satisfy the demands of stockholders. Or ... or ... or. Other than that, it's just business.

Labels: Golf

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Price Controls Alive and Well
Illinois becomes the 13th state to raise its minimum wage law above the federal level. The Daily Herald digs out anecdotal evidence that the increase will hurt some people, or else have no effect. Economists usually say that these price controls (ok, price controls usually set a ceiling rather than a floor on a price) reduce employment: there's a fixed amount of money to spend on employees, and if the cost of employees goes up, the number of employees hired goes down.

There are two other interesting arguments against the minimum wage. One is that increased wage costs provide further incentives to substitute machines or technologies, or even customers for workers. (Gas stations combine technology--pay at the pump card readers--with turning customers into workers.) A different argument is that training programs are, in part, another form of compensation to employees. As mandated wages go up, the amount of training an employee goes down--in the short run, good for the employee, but potentially harming long-run employment prospects.
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Please, Don't Buy From Us!
The market for energy production, transmission, and delivery, is beset with regulations--some going back to the 1930s. And it's one of the few products (SUVs and pornography being two obvious examples) that is the target critics who want to see other people consumer less of it.

The demand for and supply of electricity, then, is not reconciled purely by a market mechanism, but by political pressure as well. Roy Cardoto notes "I think one of the most outward signs that the electricity 'market' is clearly perverse is that the industry spends huge sums of advertising dollars encouraging people to buy less of their product."

The only other produces who might conpare would be those whose legal standing would be violated by having minors as custoners--tobacco and alcohol companies.

Thanks to Reason's Hit and Run blog for pointing this out. (permalink)

Standards-Based Ed Reform Threatens Taxpayers, with Little Benefit
There are two ways to reform schooling: standards-based, and market-based. Standards-based--impose high school graduation tests, test students more often, raise credentialling requirements for teachers--involve, well, tests, and, of course, more money from taxpayers. Market-based reforms use tax credits or vouchers to promote student mobility among schools, so that better schools get rewarded with more students (and hence, larger salaries for teachers and administrators) while poor-performing schools lose money for salaries.

Standards-based reform, being a benefit rather than a threat to the interests of teacher unions, has gotten the upper hand, through the No Child Left Behind Act, and other forms of legislation. It turns out, as Stateline tells us, that this kind of reform may spawn more lawsuits spurring ... you guessed it, ever more money for the education blog.

These "adequacy" lawsuits will point to miserable test scores as proof that taxpayers aren't shelling out enough money for schools. An analyst with the National Conference with State Legislators expects these suits to proliferate, and calls them "one of the unintended consequences of standard-based reform."

Market-based advocates of reform have always said that no amount of money will satiate the education blog. Sadly, they may be proven right--in court.

Labels: Education

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County Buys Buildling for $5 Million, Lets It Sit
Wayne County, Michigan (home of Detroit) bought a vacant megastore two years ago, for $5 million. It planned to use the property for a public works building, spending another $3 million for renovations. So far, it's ... done nothing with the property. It may soon have to fix it up, or sell it for a loss; the city of Southgate (where the property sits) threatens to levy taxes on the county if the land goes unused. (permalink)

Economic Left to Join Social Left: Free Abortions for Autoworkers
The Detroit Free Press reports that the UAW plans to demand more benefits in its next contract session. But it's a controversial benefit: paid abortions. Given that a substantial segement of the American population (otherwise known as "car buyers") believe that abortion is the taking of a human life, it should be interesting to see how automakers respond. Typically, big companies like to avoid controversy, but not (as in the case of their support of affirmative action) always. (permalink)

Baby, Let me Light My Fire
One by one, the traditions of youth practiced by baby boomers (and older generations) are going up in smoke. So, apparently, is smoke from a camp fire. According to the Wall Street Journal (article available to subscribers only) youth organizations such as the Camp Fire Girls (now co-ed) and Boy Scouts are phasing out the use of camp fires.

"Camp Fire USA," for example, plans to "emphasize alternative fuels, such as propane, in lieu of wood fires." The Boy Scouts' merit badge for cooking now involves slaving over a hot stove (literally) rather than preparing food by fire. One scout leader says "I hate campfires anymore," and some scout leaders have gone so far as to remove fire rings from forests (and, in a sign of "too much time on my hands" syndrome, washed the rocks that had been used to form one ring.)

What's driving this batty behavior? Blame the lawyers, for one. Says one scout leader "The problem is if any kid gets hurt, the parents could go after the Boy Scouts, and maybe even us adult leaders." Another reason is misguided environmental values, such as wood depletion (as if forests had been depleted by a band of 9-year olds roasting hot dogs) and a spiritualized view of the land, in which man should "leave no trace." Others say that the forests need the decay of wood, forgetting that dead brush is also so much fuel for firest. Sometimes, though, it's mere aesthetic sensibilities, that keep the folks from a gathering around the fire. "Everything gets sooty and cruddy" with a camp fire, says one man.

Not all agree that properly managed, a fire is a bad thing. Says one forest manager, "Some of our 'no campfire' signs have been used in fires." I'll keep that in mind next time I light a few logs in the fire pit on my patio. (permalink)

My Face is Your Inspiration
A short story in today's Daily Herald combines so many bad ideas that it's hard to know where to begin.

Like residents of many cities in Chicagoland, the people of North Chicago must purchase a government-approved sticker for their cars--think of this additional tax as another vehicle registration fee.

The most current vehicle sticker features ... a portrait of Bette Thomas, the city's mayor. Really.

Does this sound like something you've seen on TV lately? Perhaps portraits of Saddam on buildings around Iraq? Or if you remember back farther, Lenin, in Moscow? Though Thomas is nothing like those men, it is creepy that her visage is so present--by law--in the public sphere. It's also in keeping with the typical pattern of elected officials using government funds to keep name recognition high. (Think of "franking"--free mail given to Congress, and the Robert Byrd library, expressway, water treatment plant, etc.)

According to the Herald, the mayor explains it this way: her identity (a black woman) and story (first black person elected to the office) will inspire others.

"My election made history," she says, "and this shows the people of North Chicago what's available to them and what they can do. It says, 'Look at me! You can do it, too.'"

"Look at me?" It certainly does say that. I thought that a mayor was supposed to be a public servant. And this reminds me of the old saw that a good waiter (or in today's parlance, "server"--even closer to the word "servant") is there to serve, not be seen. (permalink)

A Kid Can't Get a Job
John Kass, writing in the Chicago Tribune a few weeks ago (registration required), points out one of the ways in which government tends to stifle good ideas. A 9 year old girl was cleaning a window in her grandmother's resale shop. A newspaper photographer must have thought "Isn't that cute?", took a photo of the girl applying the squeege, and the paper ran it.

A Labor department official saw it, and busted the grandmother for violating child labor laws. Well, she wasn't thrown in jail, but she was, as Kass puts it, "properly educated." Kass concludes "It sounds more like re-education to me."

He then writes briefly of his time working in his father's butcher shop. I'm just glad my father didn't get "educated" for the times I spent sweeping the floor in the back room of the store he managed. (permalink)

Building Patronage, One Brick at a Time
The Illinois Assembly passed a big affecting the Illinois State Highway Authority. Buried in the bill was a requirement that all new construction of sound barriers on the tollway be brick. The Chicago Sun-Times reports that "Strangely, neither the bricklayers union nor top lawmakers involved in the bill's crafting would take credit for the wording" of this gift to the industry.

Governor Rod Blagojevich vetoed the bill. It seems like an obvious move, but it's a good one for a state known for its corruption and mutual back scratching. (permalink)

Indiana: What Time is It?
Indiana doesn't observe Daylight Savings Time. During most of the year Chicago and Indianapolis are in two different time zones (Central and Eastern, respectively), but during the summer, Chicago "catches up" with Indianpolis, so the two are on the same time.

The counies in the southwest and northwest corner (part of the Chicago metro area) of the state do observe DST, however, and a group called the Hoosier Daylight Coalition would like the state as a whole to join the rest of the states in eastern time and "spring foward, fall back."

After failing in four successive legislative sessions to get their views enacted, the coalition plans to disband. Its web site, which will disappear at the end of the year, links to a Bloomington-area school, the California Energy Commission, and a contractor of time.gov, where you can always get the "official" time.

Is DST arbitrary? Yes. Is it a government-coordinated reprogramming of our lives? Yes. Do I like it? Again, yes. Paul Harvey lambasts it, pointing out that (paraphrasing here) "If the government told us 'All right folks, you have to get up an hour earlier and go to bed an hour earlier,' we would revolt. But if they call it 'Daylight Savings Tims,' we happily go along." He's right, of course. But wrong, as well. (permalink)

State Employees Could Bust Budget Deal
Jennifer Granholm, the Democratic governor of Michigan, reached an agreement with the Republican-led legislature a couple of months ago. They closed a $1.6 billion budget gap without a general tax increase. But now Granholm--the first Democrat in office since the 80s--must convince state workers to agree to $230 million in (temporary) concessions.

Good luck.

State workers say they are being expected to give up 10 percent of their compensation. Tough medicine, of course, but not unheard of in the private sector. The director of the Michigan Citizens Research Council says that "If the concessions don't occur, the money is not there to pay for 3,000 jobs." So the unions (yes, Michigan government employees are unionized, and they have collective bargaining rights) have to make a choice: pay cuts or job cuts.

The UAW (yes, that UAW) represents many of the state's employees, and its president says "No matter what meeting we go to around the state, workers say no concessions, let them make layoffs if they have to."

The president of another state employee union shows his utter disregard for the public with this remark: "Why should I pay so you can have a Secretary of State office closer to your home or so you can go camping at a state park? It's not my fault as a state employee that the market has gone to hell or that people have quit buying vehicles."

The plan proposed by the governor sounds worse than it really is. If the IRS agrees (there are some tax implications), "workers would defer a certain number of hours of pay and either take the time off in the future or have the pay moved into their 401(k) retirement plans to be paid out when they leave state employment." In other words, state employees would still get either time off or money put into their retirement funds--either of which most people would say is a good thing.

The unions want the state to cut back on its use of contractors. Natch--those are the folks in competition with the unions for state dollars (and employee dues). The state says it's already cut $20 million.

This is all worth watching. In the private sector, unions push for the benefits of their officers and members. Of course--plain old self-interest, as any economist would tell you. But they also face an ownership team which has its financial interests (the value of the company) at stake. When it comes to public employees, though, that delicate balance doesn't exist, since there is no ownership interest at stake. Both "management" and union, in the case of government employees, are on the same side--their interests lie not in budget restraint, but in getting ever larger budgets from a third party--the taxpayer. (permalink)

NYC and Flyover Country Residents Are Different, After All
Remember that famous cartoon (from New Yorker, I think), the map of the U.S., in which 9/10 of the land in sight is taken up by New York City and the Jersey shore? It highlights, among other things, how different New York is from the rest of the country.

The Washington Post (newspaper of, uhm, another unusual city) reports on the car culture (or lack thereof) in New York. Only one in four New Yorkers, it turns out, has a drivers license. "New Yorkers plan work and play around their inability to drive," the paper says. Of course, it's not hard to get around in a car when there are so many people, and
"alternate side of the street parking, rapacious meter maids, $100 parking tickets, exorbitant insurance rates, incomprehensible and contradictory highway signs and the fact that no car in New York ever stays in its lane."

Perhaps this goes some way towards explaining how the residents of Gotham don't always see things the same way that people elsewhere do: in regards to transportation, at least, they live more like residents of Paris, France, than Paris, Michigan. Think of how the auto fits into the broader American culture: hundreds of thousands watching NASCAR events in person (while millions watch on TV); getting a drivers license as a rite of passage of adolescence; "making out" in the car; long family vacations on the road, driving through states that seem to never end, such as Nebraska, Kansas, or Georgia; hauling sheetrock in the station wagon or pickup truck; country music songs about trucks, with whimsical lyrics such as "I met all my wives in traffic jams / You know there's something women like about a Pickup Man," and two institutions almost gone even from flyover country, the drive-in theater and drive-in restaurant. (On the other hand, there are drive-up bank tellers, drive-through restaurants, and even drive-through purveyors of fancy coffee.)

New York is the only area in the country in which transit is anything more than a minor part of the transportation mix. That's due not only to its culture--something policy makers, in general, try to change all the time--but because of its population density. Most Americans outside of New York don't want the population density of New York, and they're not going to want its transportation system, either.

Labels: Transportation

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Wisconsin to Study Electronic Tolling to Rebuild Highways
The state of Wisconsin figures that it will take $6.2 billion to reconstruct Milwaukee-area highways. The Department of Transportation says it is considering using electronic tolling. The Wisconsin Policy Research Institute, by the way, makes the case for electronic tolling and user fees to pay for highways. Here's their report, in PDF format.

Labels: Transportation

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Be Thankful for Inaction
"Sprawl" is the latest non-problem to be addressed by government planners. The Detroit Free Press reports on a "blue ribbon panel" with this photo caption: Strong voices on both sides of the debate may lead to political inaction.

Good.

Some policies affecting zoning and land use ought to be changed. But it's more likely they will be changed for the worse than for the better, so inaction is preferable to action.

But anyway, among the recommendations of the report:

Lower property tax rates for agricultural use, to "save farmland."
Make the distribution of state money for roads and sewers conditional on "regional growth plans."
By government rule (zoning), make people live on smaller plots of land.
More funding for mass transit [the dream continues, even in the state built by auto factories.]

The Mackinac Center, by the way, calls this "social engineering." Looks like that is still in demand, though.

Labels: Transportation

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To Follow the Money, Follow Politics
The Chicago Sun-Times reports that the money reported on lobbying in Illinois has reached a five-year high. Reports filed by lobbyists and lobbying organizations show a total of $915,000 was spent on hobnobbing with state officials during the first half of 2003.

The fifth largest spender: Exelon, the company that controls the largest electric company in the state. (Electric utilities, of course, are regulated by the state.)

Fourth largest: Diageo, the hard liquor wholesaler. (The state heavily regulates the distribution of alcohol).

Third largest: The Racing Association of Illinois. (The state has been dabbling in reworking its regulation of horse racing.)

The second largest spender: the Illinois Association of Aggregate Producers. (Aggregate is used in roads, and roads are ... yup, built by the state.)

And the single largest lobbying group in Illinois? The Illinois Education Association.

But don't worry about perceived corruption, in this case.

It's for the children. (permalink)

Scary Headline
From the Chicago-area Daily Herald's story about a plan to construct a new "city hall" in suburban Lisle: "
Visions of tax dollars dance in trustees' heads.

It's always more enjoyable to spend other people's money, isn't it? (permalink)

Toll Road Cheats in Chicago. Will Wisconsin use electronic tolling?
An audit conducted by the Illinois State Toll Highway Authority finds that 0.3 percent of all tolls due at manned tollbooths go unpaid (how is this possible? workers giving friends a wave-through?). But 10 percent of all tolls due at unmanned toobooths (some without as much as a gate) go unpaid--a 33-to-1 ratio. In the I-Pass lanes, which use electronic tolling, 6 percent of cars are toll cheaters--probably because the drivers don't have the transponder, and appreciate the ability to blow through at 50 mph.

Through an aggressive enforcement campaign involving video cameras and mailing out tickets to violators, the toll authority has reduced violations from 4.2 percent last year to 3.2 percent for the first 6 months of this year.

One oddity from the report: At at least one toll collection area, people paid more than they were supposed to. Why? One theory is that it's simply quicker. At the Joliet Road plaza, the fee is 15 cents (two or three coincs), but many motorists throw in a quarter (one coin).

A toll of 15 cents? People, if you're going to have a toll system that requires cars to make a stop, set the toll high enough to make a stop worthwhile--40 or 50 cents. On the other hand, if you're going to have small payments, electronic tolling is the way to go.

Meanwhile, the Journal-Sentinel reports on a proposal to pay for road projects in Milwaukee with electronic tolling. But don't count on it. The state is already sitting on $91 million in federal funds--uncharacteristically unspent after 12 years. The Wisconsin Policy Research Institute, by the way, argued in favor of using tolls in this 2002 report (pdf format).

Labels: Transportation

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How Rudy Saved New York During the Blackout
Did you notice the calm in NYC during the blackout, compared with its history, and with the looting in Toronto? Thank Rudy Giulani. No, he's not mayor anymore, but his policies live in, for good.

I977, a blackout in New York City resulted in $2 billion in damages from riots and looting. The blackout last week resulted in no such calamity. John Podhoretz credits former mayor Rudy Giulani for leaving behind effective public safety management--and a culture that demands, and expects, crime to be controlled by adults. As Guiliani showed when he implemented "Broken Windows" justice (keep the small stuff under control, and the neighborhood won't go to pot), government can play a role in shaping expectations of culture, and culture can change. I hope that it won't change back under Rudy's successor, who seems more concerned about stamping out smoking and raising taxes than building on what he inherited.

UPDATE
Writing in the American Spectator, Paul Beston argues that 9/11 actually served to take some of the shine off of Rudy's reputation? How so? His able management on that horrible day overshadowed the good work he had been doing for years. After "eight years of putting New York's house in order, he had built up a civic infrastructure that made acts of hooliganism -- at least on a wide scale -- unthinkable and totally unacceptable. New Yorkers' expectations had changed," writes Beston.

Perhaps some nature of civic-mindedness came back after 9/11, inspired by the ultimate sacrifice of hundreds of firefighters and others who gave their lives for others. But that came, as Beston says, after years of a vigorous "The Adults are in Charge" policing policy that wasn't going to surrender the city to its worst elements. (permalink)

Electronic Tolling to Increase on Chicago Roadways
The Illinois Toll Highway Authority has announced that it's going to add 22 electronic tolling ("I-Pass") lanes to the Chicago metro roadway system. It's about time. Tolls make sense--people who use the roads the most pay for them the most--but the heavy reliance on manned tollbooths do not. They take up way too much time, and personnel costs.

Labels: Transportation

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Alabama Tax Question
I've made several references to the plan by Governor Bob Riley to sell Alabama's taxpayers on a scheme to raise their taxes, by saying that Jesus would have them do it. (Perhaps Alabama does need to restructure its tax system, but the plan is no mere restructuring; it is also a massive tax increase.)

Chip Taylor has several links to the controversy, including A Minority of One, a site that appears to lean left (links to Noam Chomsky and other leftists prevail) and, I surmise, supports referrendum. (permalink)

"Peace"
In solidly Republican DuPage county, Ill., a group opposing war in Iraq put up a billboard along a major road--just last week. OK, so they're timing is off, says an organizer, but, she adds, the Bush "administration seems really bent on war in other places, too, so it is still pertinent."

This reminds me of a car we saw yesterday. (Of course, we live not too from some similarly detached-from-reality neighborhoods.) The car had a single bumpersticker, with one word. I looked over at my wife, pointed to the bumper sticker, and said "Peace." Her reply? "In our time."

If I was the kind to engage in automobile vandalism, that would be a great prank: order some bumperstickers with the words "in our time." Affix them underneath every "Peace" sticker that I find. (permalink)

Property Tax Reform Dead in Wisconsin
The Milwaukee Journal-Sentinel tax reform and lower property taxes in the Badger State dead. The blame-game has begun. (permalink)

Does Ugly Art Belong in a Public Park?
The combination of government and art often comes out to the benefit of neither. But the combination of the two in Green Bay, Wisc., concerns people not because of vulgar sexuality, but because some people think the artwork is kitsch, or ..., well, not in keeping with the theme of other artwork.

"The Receiver" is a 22 foot statue of a nondescript wide receiver, allegedly a player for the local Packers. The team, however, has "outgrown" the 18-year old statue. A local man has bought it, but its final fate is uncertain. The Packer Hall of Fame says the thing won't fit in their building, and the city's mayor balked at putting it in a local park. The "statue doesn't fit in a place designed to honor the area's early history."

If all public issues were of this magnitude ... (permalink)

Do As I Say ...
In the column devoted to campaign finance in Michigan, Dawson Bell adds this gem, another chapter of the hypocrisy that surrounds governent schools.

"Why does it seem likely that all the sotto voce stuff dumped on former Gov. John Engler -- about how enrolling his triplet daughters in a private Montessori school instead of the neighborhood elementary was evidence of general disdain for public education -- will not be repeated now that Gov. Granholm has announced her 5-year-old will be going to the same place?"

Engler made some attempts to cut government. Granholm, to her credit, settled on a budget that did not use huge tax increases. But she's a Democrat, and Democrats are happy to have one of their own after 12 years of Engler in power. (To Michiganders, of course, Bell's question is rhetorical; Dems were rather passionate about Engler.) (permalink)

The Folly of Campaign Finance Reform
A report by the Michigan Campaign Finance Network revealed that laws governing campaign finance didn't exactly have a lot of say in the 2002 elections. Both the Democratic and Republican candidates for governor agreed to limit their campaign spending in exchange for $1.125 in taxpayer funds. Meanwhile, however, "off-the-books" spending by the parties and other interested groups topped $17 million.

Political columnist Dawson Bell, writing in the Detroit Free Press, has the right perspective: "Fans of campaign finance reform think they could put an end to this charade by passing more rules. They are mistaken. Money will get into politics as long as who wins elections matters to people with money. "

If you want money out of politics, get politics out of money. (permalink)

Charter School Plays Stymied in Detroit
Bob Thompson, a man who grew rich by paving roads, wants to spent $200 million of his own money to build 15 new high schools in that place of dismal educational performance, Detroit. The catch? He wants these to be non-unionized schools. Republicans think that's a fine idea; Democrats think it isn't. In a party line vote, the Michigan Senate agreed to give Thompson a charter, but Governor Jennifer Granhom, a Democrat, says she will veto the bill.

Union officials, of course, aren't enthusiastic about the idea of any non-unionized endeavor being successful--especially if it's in the public sector, which has been the lifeblood of unionization of late.

Government officials in Detroit are still angry that the (Republican-controlled) state took over the Detroit Public Schools (DPS) a few years ago, and presumably, they leaned on their Democratic friends to kill Thompson's charter plan.

All of this is a story of the limitations of half-measures. Charter schools, one half-measure are a step towards educational freedom, but don't allow as much freedom as vouchers or tax credits. Another half-measure, or perhaps quarter-measure, was the state takeover of the DPS, which was modeled after the ballyhooed Chicago experiment (of limited success). It was probably the best that could be expected at the time, however.

Labels: Charter schools, Education

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Governors Scuttle Medicaid Reform
Stateline.Org previews this weekend's meeting of the National Governor's Assocation. On the agenda: the fiscal wreck that is Medicaid. The Bush administration offered states flexibility in how they operate this state-federal program (currently, most changes require federal approval) in exchange for a cap on federal matching funds.

Some governors have embraced the plan, and others have not, meaning that Congress hasn't warmed up to it either. It's not necessarily a good plan. Then again, states haven't been terribly inventive or wise in how they've responded, either: cutting services, restricting eligibility, or lowering payments to physicians and others. (They are unwise responses because they typically mean that spending is simply increased in another area.)

The National Center for Policy Analysis has outlined a more creative, and useful proposal for getting a handle on Medicaid expenses, and improving patient care. It requires moving from a bureaucratic-centered to a patient-centered approach to finance and selecting services.

Labels: Medicaid

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State Employees: Be Happy You HAVE a Job!
A confrontation between the Pawlenty administration and state employees could mean that Minnesota's state employees go on strike. As part of the current budget, pay for state employees was frozen. Governor Pawlenty's team wants to reduce from 90 percent (!) to 85 percent the subsidy it gives for health insurance of employee's dependents.

A message for state employees:
Be happy you have insurance.
Be happy you have a job!

Now, get back to work.

Labels: Health care

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The Blackout and Regulation
Northwestern University professor Lynne Kiesling says that yesterday's blackout did not come out of the blue. Rather, it stems from underinvestment in the electric grid, which can be blamed, to some extent, on the partly-regulated, partly de-regulated nature of the electric utility industry. (permalink)

That's an Understatement
Corruption in Illinois politics is legendary--and it extends, in a bipartisan fashion, beyond the Democratic party machine in Chicago to the Republican party elsewhere in the state. And that is one reason why the Republican party is in the tank, electorally speaking.

Speaking of the scandal-ridden administration of fellow Republican and former governor George Ryan (he did not stand for re-election, and Democrats regained the governor's office for the first time in decades), a state lawmaker told the Daily Herald, ""We had a little problem with ethics in the last election."