Opponents of Golf-Course Conversion in the Rough
Minnesota has too many golf courses, even if golf is popular there. Owners of money-losing courses are retiring, and want to cash in by selling to developers. Building new golf courses that make money off of charging premiums for course-side lots is more profitable than running a closed-in, decades-old course. Developers find old courses attractive: they've got trees, and roads to get to the course are already there. And finally, there are always people who will jump at the chance to buy a new house.

Put these factors together, and you get a controversy over whether privately owned courses should be allowed to be developed into housing. Says one manager, speaking of closer-in courses, "In the long run, if municipalities don't develop golf courses, there are not going to be golf courses."

As a golfer, I lament that possibility. I'd rather drive 15 minutes to an old, scruffy course than an hour to an immaculate course that combines stunning design with super-high greens fees. At this point in my game, I play too poorly to appreciate a higher-priced course.

But as a policy analyst, I have to ask ... if governments doesn't develop golf courses, so what? It's not as if golf is like education funding or public safety--something so vital to everyone's well being that we decide it is necessary to invoke the power of taxation to make sure that the service is provided.

Labels: Golf

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Hate Your HMO? Blame Congress
Ever wonder where some basic facts of life today came from? Like why you have a "health care provider" rather than a family physician? Where did HMOs come from?

Twila Brase, president of the Citizens Council on Health Care, says Blame Congress for HMOs. The short version: after creating Medicare, Congress had to do something to contain costs. HMOs were the answer. As is often the case with public policy, this had been an unqualified success. (permalink)

TIME For Socialism
The February 2 issue of Time hit a relative's mailbox yesterday, where I picked it up while doing some housesitting. The cover story on the prescription drug controversy (motto: We want drugs, we want them cheap.) is an exercise in populism, economic ignorance, and socialism. To read the whole treatment online, you either have to be a subscriber, or read it through a library or other service that subscribes, but here's a link to excerpts.

I've identified roughly 20 themes in this cover story. Here they are:

1. Guess what? Corporations and government have conspired to cheat you out of the good things in life. (Sometimes this is true, but the authors call for more government, not less.)

2. People who are wealthy (never defined, by the way) got that way through luck, or political manipulation. (To be sure, this is true of some people, such as, oh, the Kennedys.)

3. Life is becoming more complicated; people have to take on more risk. That's unfair. Government ought to "take care" of people. (Waa! Me want bottle!)

4. Off-shoring is bad and should be stopped. (I guess we should be making our own underwear rather than letting Bangladeshis have a job making Fruit-of-the-Looms).

5. Congress is responsible for high drug prices and the fact that some people have no health insurance. (True enough--but not for the reasons the authors have in mind. State and federal tax codes, along with state and federal regulations on insurance, as well as an out-of-control tort system are responsible. Of course, all these contributing factors have been sold as what is good for us.)

6. Anyone who buys a high-deductible insurance policy is a sucker. (In fact, more people ought to be able to buy such policies, but state and federal laws make that nearly impossible.)

7. It's unfair that cash-paying patients pay more than people in Medicaid/Medicare, and private insurance. (This is indeed a problem--precisely because we ought to be using cash more often for medical purchases. The high list price of services is a direct response to the bureaucratic command-and-control system we are using currently--a system that Barlett and Steele (the authors) want to use even more.

8. Congress ought to ensure that all people have "the same incentives and rewards." (Since this is not possible--we all start out with different family and social endowments, for example--this is a call for socialism, a leveling of all differences.)

9. People who buy prescription drugs in Canada are not breaking the law; they are in fact heroes striking against The System. (On a human level, one can understand what these folks are doing; but they are responding to failed government policy more than anything else.)

10. Marketing of prescription drugs is expensive, artificially inflates demand, and is bad. (But how would people know of the drugs that are, by the author's worldview, their birthright?)

11. Congress, the FDA, and Big Pharma are in collusion. (It is true to this extent: the requirements for FDA approval of drugs raises the barrier to entry for new companies as well as new drugs. As such, they do raise consumer prices.) Congressional negotiations are in secret, and the FDA is doing the work of Big Pharma. (True enough--though that's hardly the problem with drug prices.)

12. Consumer prices are artificially high, due to political and other manipulation, especially when we look at the prices paid in Canada. (See number 11; also, the series pays little attention to the damage inflicted by price controls, which is why Canada pays less-and why there is no significant drug industry there.)

13. Drug companies are just plain evil. They are "raping the American people," says Dan Burton, a Congressman whose district includes research drug maker Eli Lilly. (Maybe people in Indiana ought to fire him and get a new congressman who understands why his constituents have jobs.)

14. Prescription drugs are so important to human well-being that the industry ought to be run by government. Says John Edwards, pharmaceutical efforts to hold back Canadian importation (read: price controls) is an act of "taking the democracy away from the American people." Says Gil Gutknecht, a Minnesota Republican, pharma companies are profiteers. (How much more explicit can you get about the need for socialism than by stating that the people ought to set prices? As for what kind of service that would produce, think: Postal Service, IRS, inner-city public schools, etc.)

15. Drug companies just make too much money. They can afford price controls. (Folks, how many drugs have charities developed? The Salvation Army is a fine organization, but I don't recall that they have developed treatments for diabetes, cancer, high blood pressure, etc.)

16. The federal government is wrong to stop cheap imports. (Funny how that line of reasoning doesn't apply to foreign-made steel or, well, anything sold at Wal-Mart.)

17. The recent addition of prescription drug benefits to Medicare is a political sop, a scam. (They're right, though of course, for the wrong reasons.)

18. People are right to resent having to pay for drugs. (And houses, and bread, and cable tv, and ....)

19. There are many causes of higher drug spending (they get this one right).

20. The feds ought to "negotiate ... to get better prices." The VA already does. Medicare ought to do the same. (Yes, and the VA, as important as it is, does not make up half of all spending on health care--so the goose that lays the golden, err, drugs, has not yet been killed. And have you heard that some doctors are so fed up with Medicare red tape and low payments that they have stopped selling their services to government patients? You want to extend that model?)

21. Pharma efforts to defend themselves--lobbying Congress (golly, they have more lobbyists than Congress has members), lobbying the FDA, enforcing contracts with Canadian pharmacies to get them to not sell their drugs on the sly to Americans--are evil. Remember, that's because Pharma is evil. Why, those greedy fiends even refuse to let the feds audit their books. (Sigh).

22. The argument that reimportation of drugs is dangerous is a scam. (Not exactly, but it is not the strongest argument against reimportation and price controls. See point 15.)

23. Don't be worried about socialism in drug production; with NIH and university research, we already have it, and we're doing fine. (The article grossly over-estimates the importance of taxpayer-funded research.)

******

Charlatans. Demagogues. Economic illiterates. Too bad so many people will read this TIME report uncritically. Then again, most are graduates of government schools--institutions known for poor performance in delivering any form of literacy.

Labels: Health care, Medicaid

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Free Loans in Michigan?
It's expected that the governor will ask the legislature to develop a no-interest loan program for college students. Well, some college students. This news report suggests that the students must be in "technical" fields. It's all part of a plan to promote "cool cities" by keeping youth in the state.

Unfortunately, this suggestion rolls several policy mistakes into a single package. First, the benefits of a college degree accrue more towards the graduate than to society--suggesting that subsidizing more time in college is a bad thing. Second, it is a sort of industrial policy for higher education financing--get this bonus, but only if you study in an approved field. Finally, it continues a social policy that focuses on "being hip" rather than making the state more attractive to people as a whole.

Labels: Cool cities fad

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Creative Finance for Local Governments
Budget shortfalls are never enjoyable for government officials, but they have an upside: they force people to find creative ways to raise income and lower expenses. Some cities in Michigan are considering adding advertisements to city owned property, such as water towers, selling excess capacity in sewer systems, pooling resources with nearby communities, and other measures. (permalink)

Bread and Circuses--and Commemorative Quarters
This isn't exactly a strong story about public policy, but yesterday the U.S. Mint introduced the new commemorative quarter for Michigan. The Detroit News has a short intro to the coin, complete with a good photo that shows the new coin. Though images of an antique car and the Mackinac Bridge were more popular candidates, Governor Jennifer Granholm made the right choice by going with a simple image of the state--two peninsulas surrounded by four great lakes. With a slogan of the "Great Lakes State" already in place, how could you go with anything else? As a native of Michigan, I'm looking forward to seeing the new quarter. (permalink)

Toll Roads Proposed for Minnesota
Toll roads are under discussion for Minnesota, and none too soon. Twin Cities traffic is the second worst in the country, if you figure out where congestion is increasing the most.

The pay-as-you-go concept gets qualified support from the Texas Transportation Institute. Bill Stockton, the associate director of the Texas Transportation Institute, says "They're not a panacea; everyone wants a silver bullet to solve transportation problems. This allows you to make better use of the facilities you have instead of surrendering to gridlock."

Stockton adds, "I'm a traffic engineer, and I can tell you you'll never be able to build all the capacity you could possibly need." Well, of course, since there's something of a disconnect between road usage and the price that a person pays to be on the road. True, fuel taxes do roughly correspond with the number of miles traveled. But there's nothing to concentrate the mind on the actual cost of roads like having to hand over some change to a toll booth attendant, dropping coins in a collection basket, or hearing the "beep" of a transponder as the car passes a traffic monitor. Plus, fuel taxes don't allow for congestion pricing, or charging higher rates during the busiest times of day.

Labels: Transportation

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We Want to Stay in Office, Thank You Very Much
Stateline surveys the term limit movement, and finds that 21 states have enacted term limits, but 5 have repealed them.

Term limits have been popular with voters, and not--no surprise here--legislators. Call it enlightened self-interest, call it special knowledge, or call it plain old self-interest, but legislators have had everything to do with undermining term limits and virtually nothing to put them in place. Of 25 states with the initiative process, 20 have enacted term limits. Of the 21 states that have had term limits, 20 were enacted by initiative; only one was self-imposed.

A Cato Institute study, by the way, explains that campaigns to repeal term limits are typically "funded, and managed by career legislators, legislative staff, bureaucrats, and lobbyists," rather than the people.

Explaining the opposition, Patrick Basham concludes "Freshman term-limited legislators tend to ask tougher questions of bureaucrats and demand a higher level of performance from government agencies. Lobbyists can no longer rely on informal, long-lasting friendships with senior members who can exert major influence over a particular piece of legislation." (permalink)

In Praise of Inflexibility
Jeremy Bloom plays on the football team for the University of Colorado. He is also, literally, a world-class athlete. As one of the best mogul skiers in the United States, he has his sights on competing in the 2006 Olympics. But competitive skiing is an expensive sport, which is why Bloom wants to get sponsorship from a ski company, ski clothing company, or anyone else who give him some cash.

That puts him in conflict with the NCAA, which bans athletes from taking endorsement money--even if it's for a different sport. Writing for ESPN, Mark Kreidler argues that rule-making and the perceived need for the ban outweigh even a feel-good, attaboy story that is Bloom. He makes some strong points. It reminds me of the old remark that hard cases make for bad law. (permalink)

Drop That Cookie
An Associated Press story making the rounds says that fat is costly. "Taxpayers foot the doctor's bill for more than half of obesity-related medical costs, which reached a total of $75 billion in 2003, according to a new study."

Well, yes, taxpayers will pay about half of all obesity-related medical costs--because taxpayers already cover about half of all medical costs anyway, through Medicare (for the old), Medicaid (for the poor, and the old in nursing homes), VA hospitals (for veterans), and for insurance programs for government employees. And don't forget the tax subsidy that business (but few individuals) get for buying health insurance.

Expect this new study, though, to be used by the "food police" to call for higher prices on food, to discourage over-eating, by trial lawyers seeking to get fat wallets (as they did with the tobacco settlement), and all other sorts of, well, ills.

Oh yes, the NYT (registration required) edition spells out some costs ($7.7 billion in California alone), and a quote from a well-known public fear-mongering group.

Labels: Health care, Medicaid

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Making Government Agencies Pay Permit Fees
In west suburban Chicago, the city of Wheaton contemplates charging other units of government the same fees that it charges private businesses. The Wheaton-Warrenville school district is asking the city to waive $50,000 in engineering fees for work at two high school buildings.

City staff want the schools to hand over the dough, mostly as a way to help the city's tight finances. It would also help the city say no to a similar request from the local park district, which is expected soon.

At first, it may seem like the city ought to not charge the fee--after all, there's a large population overlap between the district and the city, so there may be no net gain to the public purse. Yet such a move is commendable, because it makes the costs of running the school system more transparent. Private businesses have "charged" internal units for services for years. Governments not following the practice ought to. (permalink)

Should Students Who Get Financial Aid Be Allowed to Study Religion?
Allowed to study religion? That sounds so ... Totalitarian.

Anyway, some legislators in Michigan (and doubtless, elsewhere), say that it is fine to study religion, as long as you approach it as a detached observer--say, comparative religion. But if you actually want to study religion and then enter a religious job, well, that isn't.

As is the case with most things these days, we're waiting for the U.S. Supreme Court to decide (permalink)

When K-12 Schools Fail, We All Pay
Of Colorado high school graduates who enter state universities in that state, over one-quarter require remedial education.

Labels: Education

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Moving On Out
The strongest rises in property values in metro Detroit are those at the fringe of the area--suggesting that dispersed growth ("sprawl") continues. (permalink)

Price Controls Moving from Canada to California
No surprise here. California legislators are talking about buying prescription drugs in Canada. Of course, prices are cheaper there. It's the law. And like most laws, it has some unintended consequences. (permalink)

Tax Cap in Alaska
Gov. Frank Murkowski is proposing some sort of cap on state spending. "Murkowski said his spending limit is higher [than a competing proposal] because it is based on a complex formula that considers changes in population and personal income."

Sounds a bit like the Colorado TABOR--a sound idea in the main--but it allows for the legislature to waive the cap with a supermajority vote. Washington state had a similar measure in the late 1990s, but the ability to overturn the limit by a legislative vote meant that the measure was gutted when tax collections weakened during the dot-com burst.

The Independence Institute, a longtime champion of TABOR, has multiple papers on the subject, including suggestions for modifying the current system. (permalink)

We Need More Phonics
So says Milt Rosenberg, professor of psychology at the University of Chicago. "Whole language" is a disaster; phonics is the remedy," he says. All competent and non-ideological reading-education specialists know that to be the case."

He links to a commentary of a recent Department of Education study. If you're interested, I think the study is here. (permalink)

Vermont School Board Endorses Choice
The Vermont Board of Education has endorsed the policy of school choice. The legislature is conducting a three year study on the issue. Three years? It shouldn't take that long. Just peruse the web site of the Internet Education Exchange, for example.

Labels: Education, School choice

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Silly Laws
Stateline has a light piece on silly and obsolete laws. Well, yes, it would appear that laws against, oh, tying an alligator to a fire hydrant are no longer needed.

But the story also mentions that it is "illegal for anyone other than a barber to advertise a haircut." It's not a silly matter, because states do indeed extensively regulate the business of cutting hair. Whether they should is an entirely different matter. The Institute for Justice, meanwhile, does a great job of fighting unreasonable regulations that restrict small-time business owners. (permalink)

Federal Spending and Analogies: A Disservice to Drunk Sailors
The Wall Street Journal's lead editorial (requires free registration) is titled "Drunken GOP Sailors: Even Bill Clinton and a Democratic Congress Didn't Spend Like This."

That does a disservice to sailors, who at the least, are fritting away their own money.

The editorial has a handy chart that displays average annual increases in discretionary domestic spending, in real terms for presidents since Lyndon Johnson. The three big spenders: George W. Bush (8.2 percent), Gerald Ford (8.0) and Richard Nixon (6.8). You'll notice something about all three gentlemen: they're all Republican. The three most tight-fisted: Ronald Reagan (-1.3), Jimmy Carter (2.0) and Bill Clinton (2.5).

While three out of the top three big spenders were Republicans. Two of the three with the record for lowest spending were Democrats. (permalink)

IRAs Revolutionized Retirement Savings. Can HSAs Save Health Care?
Despite the record of recent years, which has not been kind to retirement accounts everywhere, IRAs (Individual Retirement Accounts--to be distinguished from the political/terrorist group in Europe) have become an established part of American life.

Perhaps--one hopes--Americans will, in a similar way, start taking control over their own health care financing needs through the recently created HSAs, or Health Security Accounts.

Like the traditional IRA, an HSA is funded through pre-tax dollars (translation: you get a tax deduction). The money is then used for various medical expenses. The result: the bias against individuals taking out their own health insurance policies, much as they do for home or auto insurance, is reduced.

Why is this a good thing? First, think of the oddity of the current system: you don't buy your auto insurance through your employer, why should you buy your health insurance? Second, it may reduce the number of uninsured. Right now, if you lose your job, you will most likely lose your health insurance. Third, it bears some hope of keeping health care spending under control. Finally, if you manage your health well, and have good genes, the money you put away in an HSA could turn out to be a rather nice stash to use in retirement.

The new HSA is vastly superior to Flexible Spending Accounts. Under the old accounts, for example, money not spent in one year is wiped out. Gone. You lose it. That doesn't happen with the HSA.

Labels: Health care

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New Media
Ever think of writing a book? Good luck getting it published. Andy Kessler decided to publish it himself. Why? It was faster that way. "You can write an op-ed today that runs tomorrow, set up a Web site that sells toys in a day or two, get a million signatures and recall a governor in a couple of months. But for some reason, it takes two years to get a book published." In his case, that would have been deadly for sales. So he went through the route that is sometimes called vanity publishing. He writes about it for the Wall Street Journal.

The Guardian publishes an essay on whether corporate blogs will be the next big thing. The answer? No.

"While blogging's earliest advocates operate on the "information wants to be free" principle, many businesses would shudder at the very thought. "Information is power" is a more likely mantra in many organisations.

That's just as well. (permalink)

Sports-Crazy Public Schools
Back in late November (the 23rd), the Minneapolis Star-Tribune ran several articles on out-of-control spending in the state's public school districts.

So what was the problem? A bloated bureaucracy filled with high-paid paper pushers? Six-figure teachers who work 8 months out of the year? Neither. It was sports departments. Call it the "got to succeed" syndrome, but sports are big business in public schools.

What follows are a few items worth noting from several articles published on that day.

- Minnesota schools are sports-crazy. The state ranks only 21st in population, but is 8th in the number of high school athletes.

- One high school has as its head football coach the son of a former NFL head coach. The team has 108 students--and that's just on the varsity squad. (Many college programs are not that big.) The Eden Prairie schools devote $1.54 per year to athletics.

- Another school, in Blaine, has 25 coaches for its football programs, including 10 on-field varsity assistants.

- The Minnetonka schools have one coach who works exclusively with linebackers. No, make that outside linebackers. (There are usually two men playing this position at any time.)

- And there's money to be had at this school. Assistant coaches can receive close to $4,000 a year. It probably works out to a couple of dollars an hour, but how would you like to get paid for your hobby?

- The school's booster club will raise $250,000 this school year. It will help pay for an inflatable dome, so the team can practice during the winter. More stunning, the booster club has a larger budget than that of the average club for a Division II (mid-sized) university. Those who worked to spruce up the football facilities decried the existing ones as not meeting "our standards of world class." World class? World class? We need world class football facilities for students in government high schools?

- Edina will spend $13 million on four fields with artificial turf, as well as a swimming poor and an upgraded weight room.

- Spending in the state has increased from $76 million to $122 million, between 1991 and 2002. Even adjusted for inflation, that's an increase of 25 percent.

- The chance that any of these kids will make it in the big times is very small: 3 percent of all mens' b-ball players, nationally, will see time in the NCAA (and that includes not only Duke, but Northeast South Dakota State, and so forth).

Why all this spending? A drive to succeed. An ability of families to pay. (One family featured in the story spends $9,000 for sports camps and programs for its four children.)

And if you are concerned about equality of funding for schooling, think of this: football players in nearby Minneapolis play with used cleats, because that's all the budget will allow. (No, I'm not advocating a "cleat equity" lawsuit!)

***
I think parents ought to be able to spend money as they wish--even if it's on four-figure donations to booster clubs to coddle their sports-minded kids. But then, don't complain that school voucher plans are unfair because they let some kids go to "rich" private schools--schools that, more often than not, don't breed "world class" athletes.

(The Star-Tribune archieves are available at a cost. Search for "Success has a price," which will take you to the first article in the series.)

Labels: Education

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Fixing Government in California, and Elsewhere
California's budget troubles are the most well-known among the states. In the spirit of "As California goes," the Golden State may point the way back to fiscal health in other states. The Performance Institute and the Reason Public Policy Institute have collaborated to produce a Citizens' Budget. It's lengthy (150 pages), and not all of it will apply elsewhere. But it's worth looking at if you are interested in budget issues. (permalink)

Leaving Your Car in Idle: A Punishable Offense
Here's a policy question that's unique to the colder sections of the country: should you be punished for letting your car idle, warming up on cold winter days? Some cities make this an offense; Superior, Wisconsin, for example, hands out a $100 fine.

The sheriff for Ironwood ("Big Snow") County, Michigan related to a local newspaper columnist that "if his deputies enforced such a nuisance violation here, he'd never be re-elected, and could possibly be tarred and feathered."

The reasoning is fine: if you leave your keys in the car, you are increasing the risk that your car will be stolen. Asking the police to track down the car in that situation is asking the taxpayers to pay for your own carelessness. So perhaps there should be a way to discourage this practice. Perhaps imposing a fine if your car is stolen would work better, since there is no demand on the public purse if the care isn't stolen--and then the theft is reported. (permalink)

Using Credit Scores for Insurance Rates is a Good Thing
... so argues Brooke Leslie Rollins, who comments on a proposal in Texas to ban the use of credit scores in insurance underwriting. (permalink)

Education Reform in Illinois Avoids the Obvious
Governor Rod Blagojevich is set to lay out a variety of initiatives in education policy. He gets one part of the diagnosis right: "Forty percent of the third-graders in Illinois today can't read at the third-grade level. Something ain't working." But what about his solutions? Taxpayers should give students one book a month (from what funds?). Mandatory volunteerism (ponder that for a moment) as a condition of obtaining a high school diploma. Put the governor in charge of the State Board of Education. The best idea he offers it to hire more reading specialists--though if they are locked into failed methods, that's just going to be more wasted money.

One interesting proposal: spend a few million dollars on a new initiative to stem the number of students dropping out of school. What's interesting is not the plan itself, but the fact that it would be carried out by the Department of Human Services rather than the Department of Education.

The governor also plans to call for centralization of school purchases, as a cost-savings move.

The biggest improvements in education will probably come from things that are not in the governor's agenda, however: making it easier for mid-career professionals to enter the teaching profession, overhauling the certification process, enacting merit pay, and increasing the meager scope of school choice in the state.

Labels: Education, School choice

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Michigan Officials Plan for the Worst
While planning for the FY 2005 budget, Michigan officials expect the initial shortfall to be at least $800 million. Jennifer Granholm is resigned to more cuts in spending. But she also says "At some point there's nothing left to cut."

Yes, at some point there is. But the state is hardly at the point, when it is still in the business of operating amusements (two state fairs) and subsidizing industry (the blob known as MEGA, various promotional boards for agriculture), among other things. There's also plenty of room for smart changes to government functions.

UPDATE: Patrick Anderson, principal of Anderson Economic Group, said that the state has many hard choices ahead. ""We didn't do anything of any significance for a whole year. The fact is, we did not address the major structural problem." I don't know if Anderson wants to say that the state ought to re-do its tax system to take in more money. He could just as easily--and in my book, more correctly--say that the state ought to re-do its spending system, by doing less with less. (permalink)

Pity Ohio. The Sky is Falling
There's an effort to repeal last year's increase in the state sales tax, and it's leading to an interesting intra-party squabble. In this case, it's the Republicans who are, by and large, the party of tax increases. The Buckeye Institute has some observations. (permalink)

Free Speech Allows Prisoners to Taunt Victims' Families
It's bad enough to lose a family member to a murderer. But now, thanks to the Internet, at least one death row inmate has a platform for writing about his deeds--and publishing to the world. Says the mother of one victim, "I'm mad as hell. Those people don't even have a right to speak my name or my child's name. There's got to be a way to keep them from funneling this stuff out of prisons."

Prisoners don't necessarily have net access themselves; rather, they can send these missives--which include lines such as "I would do the whole thing again knowing death row was waiting for me"--to friends outside the prison, who then post them on web sites.

The ACLU argues, and at least one judge has agreed that this is an exercise of free speech.

This makes speech codes on the outside even more twisted and wrong. (permalink)

Unemployment Insurance Creates Unemployment: A New Twist
That's the conclusion of the American Institute for Full Employment. The basic premise, of course, is that when people have unemployment insurance payments to fall back on, they face an incentive to be less diligent in searching for a job. In short, people are more likely to find a job when their payments are about to run out.

In their most recent newsletter (not yet online), the AIFE makes a different, more subtle argument against the current system of unemployment insurance.

• Some businesses have only seasonal or cyclical needs for some employees. They will lay off employees in down times. Examples include food processors and construction firms.


• These firms must offer employees higher wages, to make up for the unstable nature of the work.


• Thanks to unemployment insurance, being laid off is less traumatic.


• Unstable employers, as a result, don't have to boost their wages as much as they would have to absent unemployment insurance.


• Employers pay risk-adjusted premiums for unemployment insurance, but the premiums are subject to floors (beyond some point, you can't be such a stable employer that your premium disappears) and ceilings (at some point, it doesn't matter how many more people you lay off--the premium won't go up any further.)

The result of all this? Somewhere from "20 to 30 percent of all temporary layoffs are caused by the unemployment insurance system itself. At the depths of recession, as much as half of all temporary layoffs may be caused by the system's distortion of the normal disincentive to have layoffs."

The institute calls for the elimination "of the tax ceilings and floors" on premiums, as well as individual accounts for unemployment insurance. (permalink)

Is Chicago is the Capital City of Illinois?
Capital cities are sometimes the largest cities of the states, but usually not. Some are reasonably close to the state's largest city--think of Lansing, Mich, or Madison, Wisc, or St. Paul, Minn. Others are far away: Sacramento, Calif., or Albany, New York. Others are small towns far from the largest population center(s) of the state. Jefferson City, Missouri, is one. Springfield, Ill., is another.

Now, residents of Springfield, as well as people in what may called "the government industry" (government officials, lobbyists, etc.) are debating whether the de facto capital of Illinois is now Chicago. The reason: heavy amounts of within-the-week commuting by top brass between the nation's 3rd largest metro area and its 168th. This article in Springfield's largest newspaper brings up some interesting questions about finding the right talent to run government agencies, accessibility (for various groups and people), government as an employer, patronage, and other questions. (permalink)

Contract Out State-Run Shuttle
The State of Illinois runs a shuttle between Chicago and its capital city, Springfield, for state officials.

A new report suggests that the state could save $828,000 by making those folks travel like the rest of us--on commercial aviation. (permalink)

Less Than Half of School Dollars Go into Classroom
The Illinois Department of Education is recommending that the state increase its funding of K-12 schooling by 9 percent.

Governor Rod Blagojevich replies: get more money into the classroom first. "When the state board of education only invests 46 cents of every single dollar that goes into the education of a child, they ought to first look at fixing their problems when they go back to taxpayers and ask them for more of their money."

While Blagojevich be posturing--Robert Schiller, state superintendent, says that some of the recommended increase goes towards the governor's goal of increasing per-pupil spending by $250--he is onto something. In the board's defense, Schiller said (quoting the Daily Herald here, not Schiller) "46 cents per dollar goes to the classroom, while the rest pays for heating, transportation, retirement costs, health care and myriad other things."

Looks like there ought to be some hard thought going into making the budget go farther by finding ways to spend less money on whatever it not involved in teaching.

Labels: Education

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Jesus Told Me to Raise Your Taxes
The story is nearly a week old now, and the sentiment behind it is even older, but Governor Jennifer Graham has suggested that it's an obligation of Christians to pay higher taxes.

Granholm cited the words of Jesus that "'Whatsoever you do to the least of these, so also you do unto me."

She defended her remarks, saying "I'm just saying that in order to have a more compassionate society, we have to keep that in mind."

Forget for a moment that Jesus was speaking to his followers, not secular governments. The governor is right in one thing. We--civil society as well as the political sector--ought to consider the most vulnerable among us.

As for public policy, well, giving heed to "the least of us" as well--at it often leads to less rather than more government involvement in civil society. (See, for example, the excellent work of the Institute for Justice in fighting against regulations that hamper businesses that serve the poor.) It can also, in today's context, include expanding opportunities for the poor in ways that do not increase the size of government. Increased school choice is one excellent example that quickly comes to mind. Right now, a system of government-monopoly schooling dooms millions of children to an inferior start to life in the work force.

Labels: School choice

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If You Enjoy Neon Signs ...
Remember those "silly laws," such as "no walking your pet porpoise on city sidewalks?" The reason for such laws, if they ever existed, has usually been lost to time.

One law that appears to fit into this category is a Michigan law (or rather, regulation) that forbids the display of neon signs inside bars and restaurants. The signs are OK outside--people driving or walking by a an outside window can read a pink neon tube urging passers-by to "Drink Duff." But once they enter the establishment, these signs are forbidden.

Until now. Attorney General Mike Cox has said that such a ban is an unconstitutional infringement on free speech. An official with the Liquor Control Commission says that the rule "probably" stems from "the repeal of prohibition." (permalink)

Primary Seat Belt Laws: A Change in Law Enforcement on the Road
Eric Peters nails the problem with "primary" seat belt laws, which allow the police to pull motorists over for the simple act of not wearing a seat belt.

"Moving violations -- things for which the police can pull you over and issue a ticket -- have until quite recently been based on the premise that whatever it is you're doing could endanger the other drivers out there. Otherwise, it was hands-off."

Driving without a belt, he writes, "is akin to being overweight or smoking; clearly not good for you -- but of no direct consequence to others."

The camel's nose under the tent door, as it were, is the issue of insurance costs, especially for health insurance. But there are many other steps that can be taken to reform insurance before we go down this road.

Labels: Health care

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Living primitively May Cost You More in Illinois
Here's an example of how a state budget crunch may be just what is required to bring about better public policy. The state of Illinois may raise the overnight camping fee in state parks from $9 to $20 for "the sites with the most amenities." Fees have not increased in over a decade. Compare that with your stay at the Hampton Inn. The increase is expected to bring in $2 million more for new and better facilities. Huge RVs, which are increasingly popular (Americans are getting fatter; their travel trailers are keeping up) in camps, and they use more electricity. It's only right that they pay more of their costs. Fees for sites with electricity will increase the most; those without will go up only $1 under the proposal.

How do state officials know that they are not charging enough? Says a spokesman of the DNR: "At many of our sites, demand is much higher than we have space for." (permalink)

Charter Schools Popular in Minnesota, Michigan
Charter schools--taxpayer funded schools operated outside the usual management and bureaucracy of government schools--got their start in Minnesota, back in 1992. Today, roughly 2,700 charter schools across the country serve 680,000 students.

While other states have, since 1992, surpassed Minnesota in charter school enrollment, officials there are expecting rapid increases. For one thing, the scope of who may obtain a charter for a school has widened; the legislature gave that ability to non-profit groups in 2001. (Among the groups starting schools: Volunteers of America.) The president of a charter school trade group as well as an official in the state's ed department cite increased public comfort with the idea of charter schools.

This idea is certainly growing; it took until 2002 before enrollment reached 10,000. Enrollment for 2004 is expected to reach 15,000.

Meanwhile, Daniel L. Quisenberry offers praise for Detroit's charter schools in the Detroit News. "Students attending Detroit charter schools open at least six years outperformed the local traditional district in seven of 10 grades and subjects tested on the 2003 MEAPs. They almost matched the remaining three scores. What’s more, charter seventh- and eighth-graders soared past their peers by eight to 20 percentage points in each subject."

Thanks to the Michigan Education Report for the tip.

Labels: Charter schools, Education

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Where Have You Gone, Reinhold Niebuhr?
Observers of foreign policy sometimes note (and lament) the passing of America's major political parties the "Scoop Jackson Democrats" (in favor of some form of a social welfare state AND a strong national military defense).

In the theological realm, there was Reinhold Niebuhr, the subject of a recent Boston Globe article. It's not a very good introduction to the man, a theologian who died in 1971, but it does give a decent 25 cent portrait if you haven't heard of him. Founder of the ultra-liberal American for Democratic Action, he was also a hawk on foreign policy.

"Newbury had come to his core perception, variously elaborated over the years, of the many-sided egotism of human beings -- which is only compounded in groups .... Reading Saint Augustine, Newbury increasingly saw his view expressed in the doctrine of the sinful nature of humankind .... As a young man Newbury had been slightly influenced by Marx, but characteristically he saw early the self-deceptions in the Marxist movement: moral cynicism on the one side, combined with uncritical idealism about the proletariat, the party, and the Soviet Union on the other."

His concern over justice lead him to endorse a strong role for the state--an institution that does not have the most spectacular history when it comes to justice. On the other hand, his turn from pacifism was a recognition of the harmful use to which the state can be put.

As a graduate student, I was discouraged from considering the moral dimensions of international politics. But Newbury stood as a witness to the imperative of doing so. His relative appreciation for the justice of the United States in the world is something that was needed in his days, in my grad school experience, and today.

[Thanks to Milt Rosenberg of WGN-AM for the link. "A theologian who made a difference." (permalink)

Import Workers or Export Jobs?
Some states are debating whether to bar companies that use off-shore labor (or even out-of-state workers) as contractors.

Bruce Bartlett, on the other hand, asks "Outsource? Of Course."

The departure point for his column is IBM's announcement that it is sending some programming work to India. Bartlett puts the blame on Congress, which shrunk the H1-B visa program (for high-skilled foreign workers) from 195,000 to 65,000 people.

The result? Another case of good intentions causing bad consequences: "So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings."

Bartlett goes on to describe the benefit to the U.S. of outsourcing, for both workers and consumers. (permalink)

Paperless Government?
Paperless government? Isn't that one of those government oxymorons, says the cynic, like Internal Revenue Service?

Not entirely, it seems. Various suburbs in metro Detroit (and, doubtless, across the country) are putting all that paper that used to be used in city council meetings--agenda, supporting documents, and the like--into electronic formats.

The city of Livonia, for example, purchased laptops and copies of Adobe Acrobat, and claims that it recouped the expense in eight months. Dan Putman, the director of information systems for the city, said "The old paper stacks that we replaced were 10 inches to 2 feet tall. [Going electronic] It made it a lot faster for projects to move through the council now, and there's a reduction in cost, because we don't have to use all that paper and do all that filing."

Farmington Hills, a pioneer in the state, used to spend anywhere from one to four hours of labor each month to assemble packets for city council meetings. Now that work is down to "a couple of hours."

One problem that could stymie the move: council members who prefer dead-tree versions of agenda.

And then there's this question: perhaps government efficiency isn't always such a great thing. Having to secure a search warrant, for example, is certainly inefficient compared with just barging in; legislation would proceed more quickly if it required only 20 percent of the vote. Granted, these examples are of deliberately placed, procedural inefficiencies. But perhaps the inadvertent inefficiencies of paper shuffling have some benefit, too, though somehow I doubt it. (Think of all the time businesses sit awaiting regulatory approval for this or that, for example.) (permalink)

Is MADD Mad?
Eric Peters, who frequently writes on matters automotive, celebrates the decline in the number of traffic deaths attributed to alcohol: they've dropped 50 percent since the early 1980s.

The decline has been brought about by both changing societal expectations and stricter laws. But he takes on Mothers Against Drunk Driving (MADD) for suggesting that the legal threshold for intoxicated driving be dropped even lower, to a blood alcohol count (BAC) of 0.04. (Most states, at the risk of running afoul of federal requirements, have already lowered the limit from 0.10 to 0.08.) Such amounts, he says, impose minimal risks.

He also attacks the use of sobriety checkpoints. "It's one thing to lock up the person who is weaving all over the road -- quite another to arrest a person at a sobriety checkpoint simply because he has trace amounts of alcohol in his blood."

MADD does itself no favors, he concludes, when it argues that opponents of its measures are simply drive while drunk. "One can legitimately object to the use of random stops by police absent probable cause ... just as one doesn't have to ... 'support criminals' because one believes that police should be required to secure a warrant before conducting a wiretap or search of anyone's home." (permalink)