Happy Memorial Day
There will be no new items added to the PolicyGuy blog today, in honor of Memorial Day. Back tomorrow. (permalink)

Charter School Loses Charter. That's Accountability.
Central Michigan University, chartering authority for the Walter French Academy in Lansing, announced it will yank the charter for the K-12 school. Without a charter, the school will have to close.

The university cited financial, academic, and management woes at the academy. The closure is a blow to the families involved, of course; some of the students had been expelled from other schools, and turned to the academy for help.

Is this failure an indictment of charter schools as a whole? Hardly. The revocation is a warning to other charter schools: get things right, or we close you down.

And the last time that happened to a government-run school was ... when?

Labels: Charter schools, Education

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Politicians Raise More Money. So What's New?
The Detroit Free Press's political reporter, Chris Christoff, says that "State lawmakers are raising money this spring at an unprecedented pace." So what's new?

Also old news: an attempt to find (yet another) fault with term limits. Says one pol, "Term limits has had the opposite effect of what advocates said would happen. There's more politics, more fund-raising."

Politics practiced by politicians. Imagine that!

Term limits will not bring all-wise, detached policy professionals into the legislature. They can't, and no one should think they can.

On the other hand, term limits have worked as designed when it comes to bringing competition to politics: "Republican and Democratic caucuses now raise enough money to fund candidates in 30 to 40 selected House seats, about three times as many as before term limits." This should mean that more races than ever are competitive. (permalink)

Bring Back BRAC.
The Base Realignment and Closure commission [BRAC] has a history of saving taxpayers millions of dollars a year and improving military readiness by closing obsolete military installations. Paul Gessing is worried that political support for the commission may be coming to an end.

The idea of a now retired congressman, Richard Armey, BRAC has been a simple way to reduce pork barrel spending by eliminating a fundamental element of public choice theory. Members of Congress may agree that in the abstract, the military has too many bases that are too costly to maintain and are unnecessary for the size and composition of the armed forces. But who wants to say "When I was in Congress, the Pentagon took away 15,000 jobs from my district?" Before BRAC, defense department attempts to close bases were routinely denied by re-election-minded members of Congress.

UPDATE: Here's the official site of the Base Realignment and Closure
Enter the BRAC, which decides what bases to close. It submits a list of proposed base closings to Congress, which can approve or disapprove the entire list, but can't cherry pick. That's actually good for Congress, since it gives members a political cover.

The problem, after a decade's worth of work and several rounds of base-closings, is that noises about moves to kill or delay the BRAC's ongoing work may have serious support. The Department of Defense estimates that if the next BRAC session--scheduled to start next year--goes forward, it could reduce costs by $6 billion a year. That's money that could be be put to more militarily-useful purposes, or returned to the taxpayer.

My first paper in graduate school was about the legislative history of BRAC. It didn't find any surprises. If I remember correctly, members who voted against creating BRAC--presumably on some high constitutional principal--endorsed the first set of recommendations once the committee was in place. This was especially true if someone else's district got hit.

UPDATE: Here's a link to the official BRAC site.

Labels: School choice

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There's Church. And there's State.
Some people are calling for the Catholic church to deny communion to politicians, such as John Kerry, who favor unhindered access to abortion. Who am I to stop them?

This question comes up as I notice yet another essay saying that it's illegitimate for the church to make this call. (For subscribers of the Wall Street Journal, Al Hunt calls it "Playing Politics at the Altar.")

Whatever reason the church offers for withholding the sacrament--I might try an explanation, but fearing that I will mangle it, will refrain from doing so--it really shouldn't matter to anyone outside the church--spiritual life included.

It could be argued that the media frenzy over the question reflects simple demographics: there are a lot of Catholics in the country, and by talking about the question, the commentariat is simply engaging an issue that interests a large portion of its audience.

True enough. But the ongoing press coverage also reflects the domination of all of culture by the politically-tinged value of self-determination ("Who's going to tell me if I can take communion? No one will tell me how to think"), the privileged position of the abortion rights regime, and most disturbingly, the fact that political thinking runs throughout all spheres of life.

The church has its own rules for belief, behavior, and debate. If you find that attractive, work within that world. But is the question of "When can the church withhold communion?" a matter of public concern? No way. (permalink)

Privatized Rest Areas.
The Mackinac Center for Public Policy is calling on the State of Michigan to contract out the operation of or sell outright its 83 rest areas.

The state spends nearly $7 million per year in upkeep and operational expenses, costs that could be borne by private companies that had a franchise to sell food or other goods and services in the rest areas. The State of Ohio, for example, received over $12 million in 2002 from rest areas on the Ohio Turnpike. (Toll roads are free of the state and federal prohibitions on commercial activity on government-owned land near highways.)

Labels: Transportation

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The Ethical Consumer.
Business ethics become a hot topic whenever there is a corporate scandal, such as Enron. But what about consumer ethics?

Some consumers, for example, "buy" a product such as a large-screen TV or article of clothing, fully expecting to return it after a dinner party or the SuperBowl is over. While this article from Ideas on Liberty is over a decade old, it's a good, short introduction to the broader question of consumer ethics. (permalink)

Stick with the Boring Stuff.
My latest work for the Mackinac Center examines the use of tax increment financing (TIF) and historic districts as a way to invigorate downtown areas. Better than fancy scheming, I argue, cities ought to address problems--high taxes, poor services, crime--that drive people out of cities. (permalink)

Tax Rates Drive Population Growth.
"Already Gone" might as well have replaced "California, here I come!" as the Golden State's song, as California lost over 750,000 residents between 1995 and 2000.

Where did three-quarters of a million people go? Over half went to Arizona and Nevada, neighboring states with lower taxes. That's the conclusion of the Arizona-based Goldwater Institute. Its study, The Tax Man and the Moving Van, examines population trends among the ten most highly taxed and ten least taxed states.

The conclusion: "people exercise their options by moving into states with low tax burdens and favorable business climates, and exiting states with high tax burdens, poor business climates, and higher relative costs of living." (permalink)

The Folly of Campaign Finance Reform Revealed. Again.
A major political party may hold its national convention this summer but not actually nominate a candidate until several weeks after that.

Internal turmoil? No. A way to skirt the limits of campaign finance laws.

Says the Wall Street Journal, "This is always the way with campaign-finance limits. Politicians endorse them to sound holier-than-thou but then immediately turn around and exploit or invent loopholes and exceptions."

The solution is not a futile attempt to prevent or plug loopholes, but to do away with most of the "reforms" that have done little but create jobs for attorneys and accountants and others who specialize in working the rules. (permalink)

Home Schooling: Not Just for Baptists Anymore.
Diana West says that her decision to home school had nothing to do with religion (conventionally understood) and everything to do with lousy education.

Before discussing the ways in which multiculturalism warped the government school's presentation of, say, Thanksgiving, she lays out her reason for teaching the children herself: "I came to believe there was no way on, er, God's green earth that I could possibly teach my girls less than they learned in that school." One assumes that she believes that she can teach them better, even. With all the mindless activity that goes on in the name of education these days, that's not a bad assumption.

She also points out that when the Department of Education asked parents why they taught children at home, the most commonly offered reason (offered by just under 49 percent) was the ability to offer a better education to one's child than what was available in the local government-run school. Religious reasons came in second.

A few days ago, one of the Chicago Boyz predicted that the rush to "gay marriage" will cause an exodus of students from government schools: "Public schools will soon (next year, September of '05) have mandatory education in which the struggle for gay rights is depicted alongside the struggle for Black civil rights as central to American history. No teacher who does not teach and support this view will be employable. This will provoke even more, in my view justified, outrage."

It could also add to the number of parents seeking--for religious and secular reasons alike--alternatives to government-run schools.

Labels: Education

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If You Write About Prescription Drugs ...
Does that mean you're a pill popper? Spammers and spam engines must think so. I don't know how many spam pitches for pain killers and other pills I've gotten.

Got to tighten down that spam filter. (permalink)

Governments Can Foster Economic Development ...
By doing a few things right, and otherwise refraining from favoring one firm over another. Michael LaFaive, of the Mackinac Center, argues that "general tax policy reform is more successful than those using targeted strategies."

Why? "State governments face extraordinary knowledge constraints when they presume to pick winners and losers in the marketplace. Of course, private actors face knowledge constraints, too. The difference, of course, is that private citizens — entrepreneurs, for instance — need only concern themselves with information particular to maximizing their own self interest, which in wonderful fashion, most benefits the common good."

He's got some interesting stats to back up the argument. (permalink)

How Could I have Missed This?
The PolicyGuy blog is a little over one year old. That makes it exceptional, at least in its longevity.

A study conducted last year estimated that one quarter of all blogs live but one day: they are created, and never again updated.

Less than 3 percent of the blogs surveyed by Perseus Development Corporation were updated weekly or more frequently. (permalink)

Put Down That Sugar.
The latest tussle between states and tobacco companies: flavored (and sweet) cigarettes.

The new smokes contain a variety of flavors, including citrus, chocolate, and mint. Says one advisor to the Massachusetts Department of Health: "By masking the natural toxic products of smoke with these candy flavors, they're basically trying to turn a blow torch into rice pudding. It's unconscionable." Critics argue that the new products are designed to attract under-age customers. Cigarette companies say they are simply trying to offer new choices to adult customers. (Not being a smoker, I don't find this especially appealing.)

Imagine where this will lead. First it was RJ Reynolds. How about chocolate makers and vendors? After all, there are health problems associated with their products (too much sugar is bad for you), and some adults swear that it's addictive. And if sweetness is something that primarily attracts youth, well ... let's ban sugar! (permalink)

Microsoft's Latest: A World-Processing Program.
Critics of globalization will jump on a typo in today's Wall Street Journal: Bill Gates and Co. are now selling computers that include "Microsoft's world-processing software."

(Here's a link for subscribers.) (permalink)

Conceal Carry One Year Old in Minnesota
Minnesota's conceal carry law is just over one year old, and Mitch Berg reports on a "pro-victim-disarmament screed" and notes an outstanding website for all issues related to conceal carry, including examples of how citizens with permits protected themselves. (permalink)

You're Not From Around Here, Are You?
While economic vitality often comes to locations open to outsiders, one key Minnesota politician has turned against outsiders.

Economic and cultural growth in a region often come from outsiders who bring a different perspective (see, for example, the works of Joel Kotkin, Thomas Sowell, and Richard Florida).

Minnesota, meanwhile, has had a bruising fight over statewide curriculum standards for K-12 government schools. Early this week, the governor's nominee for director of education was rejected on a party-line vote. Cheri Pierson Yecke and her Republican allies had riled up the Democratic party and its base, the teachers union.

As I read a post-firing article, one thing stuck out: the comment that part of Yecke's problem was that she's from out of state. Yecke moved from Virginia to take the job.

Said Dean Johnson, the president of the Democratic-controlled Senate, "Quite often you would hear public pronouncements how terrible Minnesota schools were. In fact we're in the top five in our ACT test scores. We test very well. Do we have problems? Absolutely. Let's identify our problems and move forward. So, the criticism of our present school system from someone who had just moved here was a little hard to take."

It reminds me of the old saying ... "You're not from around here, are you?"

Did Yecke have some catch-up work to do to understand the particulars of the state's education policy? Sure. Should that have disqualified her for the job. No way. In the end, it may have been ideological and power politics that doomed Yecke's nomination. But Johnson's comments certainly don't do much for the state's image.

Labels: Education

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Medicaid Mess.
Medicaid's financial troubles cannot be fixed by raising taxes. This is not a statement of preference for small government, it is a recognition of reality.

At least that's the conclusion of Beau Egert, writing in Veritas, the quarterly publication of the Texas Public Policy Foundation. (Here's the link, in PDF)

Among the facts:

• Health programs take up 30 percent of state budgets, nationally.
• Over half of all states (28) expect shortfalls in their Medicaid programs this year.
• Medicaid, on its existing path, will crowd out every government program in existance.

Raising taxes only delays judgment day, and doing nothing is not a serious option.

Labels: Medicaid

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I Yahoo. Do You?
If you use Yahoo for email, you can also use it to read headlines on the PolicyGuy web site.

My Yahoo, is like many other programs that lets the reader customize a home page. It will pull up a weather forecast for your area, as well as news headlines or stock quotes or whatever else you specify.

My Yahoo now also offers a way to read headlines of other websites, such as Instapundit, the New York Times, and PolicyGuy. They show up on the My Yahoo web page in a format and location that you specify.

I'm a policy guy, not a tech guy, but as I understand it, this is what you need to do. Look over in the left-hand column of the PolicyGuy home page. Find the icon that says "Add to My Yahoo." Click. Call that window 1. You'll need that information. In window 2, start My Yahoo. The information you get from window 1 will be needed somewhere in window 2. Enter the information as appropriate, and you can read the PolicyGuy blog without actually having to go to the web site. You'll find it on the My Yahoo web site, your own personal library.

This isn't the only option, of course, but it may be a place to start. (permalink)

The Latest on Michigan's State-Owned Ski Area.
can be found in this issue of Michigan Privatization Report.

Will the ski area at the Porcupine Mountain Wilderness State Park thrive? As a snow sports enthusiast who has now written two published articles on the subject, I hope so. The private contractor who now operates the skill area in the state park has shown some innovative ideas, so maybe he can pull it off. On the other hand, he faces a challenge: the area is far from population centers, and people who plan to travel several hours to a ski destination may, understandably, look outside the Midwest.

Regardless of the commercial success of the "Porkies" ski operation, the state was right to turn to the private sector. Literally, the state has no business in snow business. (permalink)

It Had to Happen Sooner or Later
Higher gasoline prices have become political issue.

Some are calling for releases of oil from the Strategic Petroleum Reserve (SPR). Here's what the Detroit Free Press has to say about that: "The reserve was most recently tapped in 2000, when the Clinton administration put 30 million barrels of oil onto the market. Oil prices dropped to $30 a barrel, down from $37 a barrel, but rebounded within days to $36 per barrel."

Rebounded within days. The SPR is, to borrow a cliche, a drop in the bucket of oil reserves. If government action of any sort is required, we could start by opening up a small section of Alaska (known as ANWR) to drilling for oil. (permalink)

When "Get Something Done" Means "Spend Other People's Money"
The Associated Press has rounded up 5 people to comment on the end of the Minnesota legislative session. Four are unhappy; three are unhappy because wanted money send their way.

Next time you hear a complaint that gridlock is causing nothing to get done, remember that probably means that someone's pocket is not being padded with tax dollars. (permalink)

Sleep with the mosquitoes? You'll Pay More
The trend towards user fees in some non-essential government services is moving right along. Michigan, for example, is increasing the rates for access to or camping in its state parks.

"In 2003, the legislature removed general fund support from the state parks, or about 18 percent of the Recreation Bureau's $51 million operating budget," reports a newspaper in Ludington, a popular vacation spot.

Overnight campers must pay a fee, as must those who drive a vehicle into the park. The rates for both are going up, with state residents getting a break compared with out-of-state visitors.

Says the supervisor at the local park, "From what they're telling us, we still are very competitive on a national average for a premium site. We're still going to be very comparable to other state park systems."

If a state is going to be in the business of running a recreation department, the least it can do is collect fees to make the system self-sufficient. After all, campgrounds are not exactly essential services of government, and their use by any definition of the word is voluntary.

For more information on the fiscal health of state parks across the country, see the Political Economy Research Center. (permalink)

Without Market Prices, Government Should be Small
The Mackinac Center's Jack McHugh explains that the reason why government should be biased on the small side: there is inadequate price information to know if we are getting the right kind or amount of government.

In the government sector, he says "there is no choice, so no price, and therefore no way that we can even approximate the optimum public policy solution. Is there anyone who thinks we get the best value for any good provided by government? This is not because government workers are bad, or don’t care. But without the relentless spur to innovation and efficiency provided by competition and choice, the process by which markets discover and provide the ever-changing optimum can’t happen." (permalink)

Bickering, or Two Stronger Parties?
The latest fad among Minnesota's chatterati: bemoaning a rise of bickering.

Take for example a recent article on MNPolitics.Com says that the state suffers from "a team-sports-run-amok culture," in which legislative discussions are dominated "by the far wings of the two major parties."

Somehow in these stories, it's the Republicans who have the problems with extremists and the yellers-and-shouters, not the Democrats. But the emphasis on those new to power reveals a structural explanation.

To a large extent, the changed nature of the debate is simply the result of political power actually being up for grabs after so many years of one-party rule. You've got one party (Republicans) grasping to consolidate power after being out of power for decades, and another party (Democrats) fighting to retain what has been its own. With that as the foundation, the stakes are made even more significant with the increasing differentiation, ideologically, of the two parties. (In other words, if you're someone to complain about "Tweedledee and Tweedledum," cheer up. Choices are becoming more real.)

All of this doesn't sound something other than what could be expected, and not a sign of the apocalypse. (permalink)

One Less Beer, But Shoot Those Mourning Doves
Minnesota's legislature has wrapped up its regular session. The most significant legislation passed: making more strict the definition of legal intoxication, and creating a season for shooting mourning doves.

At least that's the opinion of three writers of the St. Paul Pioneer Press (intrusive registration required.)

Minnesota Public Radio (text report) has a wrap-up that does not require registration. Among the bad news (it didn't pass) good news (it shouldn't haven't been there anyway) items: spending for a light rail train.

Among the issues not "settled" (in the eyes of the press) is taxpayer funding for a football and baseball stadium. Since a permanent ban in such spending folly is in all likelihood not possible, I'd say that the issue is settled enough.

Just remember that when someone complains about "gridlock." It may simply mean "the legislature didn't do what I thought it should do." And sometimes, we're all better off for it.

Note: it's possible that there will be a special session yet this year, though one cannot be certain about that. The Senate, currently under Democratic control, could swing to the Republicans in the fall election. That could bring dramatic changes next year, and bring many more pieces of legislation, some good, some bad, through the process. (permalink)

Homeboy's Legacy Lives On
Though Jim Wright is no longer Speaker of the House, his legacy lives on for air travelers who wish to fly Southwest Airlines.

Southwest Airlines is starting up service in Philadelphia. But if you live in that city--or any city outside of the southwest--can't easily take Southwest to Dallas. Instead, you must first take flight to New Orleans, Houston, or a few other cities. Then you must get off the plane, claim your bags, go through security again, and then (registration may be required) take a separate flight to Dallas.

I had my own experience with this a couple years ago. I knew that Southwest was based in Dallas. I also knew that it had a large presence at Chicago's Midway Field. I wanted to fly from Midway to Love Field, in Dallas. The web site wouldn't let me book the flight. Do the same today, and you'll come up with the same result.

A more detailed history of Jim Wright's legacy is available here.

Wright's predecessor, Tip O'Neil, is famous for the quip "all politics is local." Wright, lived out this aphorism when he picked his hometown of Fort Worth over neighboring Dallas, as well as air travelers nationwide. (permalink)

Great Lakes Marine Data
Summer's coming, so here are some web sites that give weather observations for the Great Lakes.

Wind speed, water temperature, wave height, and other data for Lake Superior and Lake Michigan are available here. And click here for Lakes Erie, Lake Erie, and Lake Ontario.

It's still early in the season, but as of a few hours ago, but the water temperature is still only 40 degrees.

For more information than you'd ever want to know about industrial-scale shipping on the Great Lakes, start with Boat Nerd. (permalink)

Self-Dealing in Public Schools
It's bad enough when civil servants put their own needs ahead of the public; it's even worse when public policy allows them to have a conflict of interest by serving on governing boards.

Writing for the Independence Institute, Benjamin DeGrow argues against The Wrong Kind of Self-Employment It happens when school district employees are also allowed to serve on the board of education. After examining Colorado's largest school districts, he finds that in 16 cases, at least one member of the board has a spouse employed by the same district. In four cases, a board member himself is a district employee.

The conclusion: "The law should reflect the fundamental incompatibility of a person simultaneously serving as an elected board member and paid employee for the same school district."

Labels: Education

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Why It Pays To Be a Smart Shopper: Tax Savings
A dispute over a wireless phone bill brought home again both the power of bargaining and the cost of taxes.

I thought that my wireless overcharged me on the last bill--by about $40. After some time on the phone with them, it turns out that they overcharged me not just $40, but more like $70.

That's when I started to think again of how taxes inflate the amount of wage labor required to purchase stuff.

Say you want to buy a widget with a retail price of $100. You're going to earn $100 to pay for it. Is that enough? No way. Not even close.

Start with your $100 in income. Then start taking out taxes. Let's start with taxes on that income.

After FICA (6.2 percent), Medicaid (1.45 percent) , a state income tax (5 percent) and a federal income tax rate of 15 percent, and you're down to a net of $72. (Of course, if you are one of "the rich," your federal income tax rate will be even higher.)

But wait. There's more. You probably need to figure in sales tax. If that's 6 percent on a $100 purchase, your $100 in wages can actually buy only $66 worth of widget--$34 of the money you earned has gone to taxes of various sorts. (Buy wireless phone service, beer, or any other produce or service with extra taxes, and your $100 in income buys even less.)

I also did a back-of-the-envelope calculation the other way: to purchase $100 worth of widget, how much income must you actually earn? More than $100. It's more like $138.

Either way you figure it, taxes add at least one-third to the cost of acquiring any widget. If you're counting on wages to get the stuff of life, you need to work one-third more hours than your hourly rate would suggest.

On the flip side, all those taxes also mean that if you save $1 off the price of a widget, you're saving more--at least another 33 cents that you would otherwise have to add in for taxes.

Labels: Medicaid

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Taxes and Fees Price 30 Million out of Cellular Service
Cell phone users pay about 14 percent extra in taxes and government fees, which could be pricing 30 million people out of cell service.

The Progress and Freedom Foundation reports that cell phone customers pay $16 billion a year in various government-imposed costs. (permalink)

Research tab: $7.9 billion. Failure rate: 96 percent
What's it cost to make a prescription drug? Lots, when you consider that the largest drug company spends nearly $8 billion on R&D, and fails 96 percent of the time.

In "The Thrill of Defeat," Bill Breen explores the world of world of pharmaceutical research, where failure is the rule of the day. (The story is in the June issue of Fast Company, available online to subscribers only.)

Pfizer's senior vice president of global research and development admits that "only a tiny minority" of the company's scientists "will ever touch a winning drug." As a result, she wants the firm to double its success rate. If she is successful, Pfizer will still have a 92 percent failure rate.

Learning, especially in pharmaceutical research, comes through failure. But the tuition at the School of Failure is very high. As companies move beyond the low-hanging fruit to explore the cures that have eluded them so far, high costs of research--and high retail costs--are inevitable. But the alternative, an industry's innovation shuttered by price controls, is even more costly. (permalink)

Union-Only Rule Backfires on Union Workers
Cobo Hall, Detroit's convention center, has a union-only rule. For some groups seeking to rent the space, that makes Cobo an unattractive place to hold a meeting. Says who? The AFL-CIO, for one. The result: some jobs for union workers head elsewhere. (permalink)

Take Your Caffeine Drip by Drip
Legislators (and legislative watchers) working the late shift ought to take their caffeine in small doses.

That's the conclusion of a study conducted by researchers at the Rush Medical Research Center, in Chicago. (permalink)

Gridlock is good, even if it "wastes money"
The Minnesota legislature may soon adjourn its session for the year without having accomplished much, but burn through $7 million in salaries and per-diem charges. And that's the upside.

Lawmakers are supposed to be dealing with a budget deficit of $160 million. That's small compared with last year's deficit, which was addressed without a general tax increase. Governor Tim Pawlenty says that he can fix the shortfall on his own, if required.

A number of bills, including the Taxpayers Bill of Rights and a codification of the definition of marriage to mean what is has meant for 4,000 years of recorded history, may go without passage. On the other hand, the legislature may also adjourn without taxing Wilma Waitress and Andy Accountant to pay for new sports palaces for the state's NFL and Major League Baseball franchises.

There's some griping around the state about the waste of money that the legislative session has brought about: if the legislators get their per diem expenses and salary without having gotten the big bills passed, aren't they guilty of squandering taxpayer dollars?

Perhaps. But consider this as well. "Almost any deal would be a bad one," David Strom told reporters. "The $7 million wasted during the session would be a bargain compared to the damage they could do."

Indeed. (permalink)

Half-way there to Socialized Medicine
A survey of Wisconsin residents finds that half of the adults in the Badger State get their health insurance from a government agency.

The report, Health Insurance in Wisconsin (PDF copy here), is based on a survey of 1,000 residents.

"Wisconsin residents with private health care insurance pay twice for health care coverage. First through their taxes they pay the insurance costs for public employees. Secondly they pay much higher premiums for their own insurance to cover the cost-shifting associated with low reimbursements to providers for government health care coverage."

Labels: Health care

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A Crisis of the Uninsured?
It's "Covering the Uninsured Week," meaning you may be hearing from advocates of the mess of bureaucratic socialism that got us into this mess.

The insurance commissioner of Kansas, for example, says "We cannot expect the private sector to do all of this on its own. The public sector is going to have to step forward."

Well, the public sector can step forward--not by enrolling more people into failing government programs, but by reforming insurance regulation and changing tax laws to make the individual purchase of insurance more appealing. A shift in attitudes from health insurance to true insurance, rather than pre-paid care, is also required.

The Flint Hills Center for Public Policy reminds us that "While it is often assumed that a lack of resources is the culprit behind a lack of insurance, this may not always be the case." "In the last decade," it says, "the greatest increase in the uninsured took place among the wealthiest Americans, while the least wealthy actually experienced a decline."

Labels: Health care

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Doctors "Stuck" by Malpractice Insurance Fees
High rates for malpractice insurance are driving some doctors out of business--and keeping others in place.

The American Medical Association says that 19 states are in "critical" condition when it comes to malpractice insurance rates. They will find it hard to attract doctors from out of state. (High rates are often blamed on out-of-control lawsuits.)

But it's not just that doctors may find a new environment less than hospitable. They may also pay a penalty simply for moving. Under something known as "tail coverage, "doctors typically must pay their insurance companies double their yearly rate when changing policies to cover any claims that might occur after they leave," says the Southern Illinoisan. (permalink)

Heritage Foundation Releases Economy Watch Blog
Unemployment rates, inflation, GDP growth, and more, all accessible from Economy Watch, a new site of The Heritage Foundation.

Now if they could increase the font size to make the whole thing more readable. (permalink)

There's Money in Special Education
What gets measured gets the attention. And what brings money gets even more attention from governments schools.

The Goldwater Institute has a new report on education, with some interesting findings. Indian and Hispanic boys are much more likely to be labeled as in need of special education if they attend predominantly white schools than if they in majority-minority schools.

Commenting on this finding, the institute concludes: Arizonans should vigorously pursue remedies for the over-enrollment of students in special education. With the possible causes of misidentification—including perverse financial incentives, the avoidance of standardized testing, the misuse of special education as remedial education, and segregationist impulses—it is clear that the problem is a deep-seated feature of public education in Arizona that will require profound reform. The study suggests three possible remedies: changing the state’s special education funding formula, instituting universal screening for the identification process, and creating a parental choice program for children with disabilities. These options do not represent mutually exclusive courses and, in fact, should be implemented simultaneously. (permalink)

A New Blog on Environmental Policy
If questions about the environment, science, transportation, or related subjects are you interest, be sure to check out The Commons. It's a new blog. (permalink)

Blogger's Back
The snafu with blogger's upgraded software seems to be fixed. Still, there are minor annoyances behind the scenes that are being worked out. (permalink)

Michigan Cities Free to Enact Bad Policy
Governor Jennifer Granholm has vetoed a measure that would prohibit Michigan cities from enacting "living wage" ordinances.

Detroit and 12 other cities have their own minimum wage laws, which exceed state standards.

The National Center for Policy Analysis points out that the chief beneficiary of "living wage" laws are government employees. Some employees, in other words, gain, but unemployment increases as well, due such laws. (permalink)

Colorado Launches College Voucher Plan
Colorado became the first state to start shifting college funding from institutions to students.

Governor Owens signed a bill that will give every Colorado student $2,400 to attend any public university or college. (Low income students can also get half that amount if they wish to attend one of three private colleges.)

A Denver television station offers a summary of the law:

• Students are limited to 145 credit hours (more than sufficient for a degree, but an important start to avoid the proliferation of "sixth-year seniors" at public expense.)
• Students direct the expenditure of the money; it goes from a trust fund to the college, at the request of the student.
• The plan is a way to deal with college's objections to being constrained by the constitutional limit known as the Taxpayers Bill of Rights, or TABOR. Money that students bring to the college through this measure does not count towards the college's spending cap. Thus, the measure may not only be a way to bring more market discipline to college, it may also help neutralize the objections to TABOR within higher education.

On second second thought, scratch that last phrase. What college has ever said "we have enough money, thank you very much?")

The measure appears to resemble a proposal put forward by the Independence Institute back in 1997

Labels: Education

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Google Introduces Retrograde
Google has introduced various changes to the blogger software that powers this site. Unfortunately, that's causing some problems behind the scenes here. Updates will be less frequent for a while, until we adjust to the "upgrade." (permalink)

Cheap Drugs: First Canada, Now Europe?
Minnesota's governor, Tim Pawlenty, threatens to shift his state's drug importation efforts to Europe if the Canadian connection is shut down.

Border-state governors, including Pawlenty, justify their attempts (in part) by arguing that, well, those Canadians are just like U.S. residents. Said Vermont's Jim Douglas, "Those of us who live in border states, we don't in many ways regard Canada as a foreign country."

I suppose that's understandable in some ways. But in its price control over prescription drugs, Canada is (thankfully) a foreign country. At least for now.

(Note the equivocation in this article: "the drug companies are striking back against what they see as illegal activity." Well, it's either illegal activity, or it's not.) (permalink)

Is Truancy Still a Crime? Apparently, Yes
A recent movie involving truancy prompted one wag to wonder if truancy was actually still a crime. Apparently so, at least in one Michigan community.

Eight parents in remote Iron county have been charged with "failure to cause a child to attend school."

Some folks are up-in-arms about such a compulsion. I'm not one of them. For one thing, government schooling is so broken that truancy laws are, with the exception of small communities such as those in the Hurley School District (in Iron county) are virtually unenforceable.

The real scandal of truancy, of course, is the fact that vast numbers of students in some districts simply drop out. Nationally, nearly 1 in 4 students never graduates. (See this report, in PDF, from the Manhattan Institute.)

Perhaps if we allow parents greater freedom to choose the kinds of schools their kids attend (tuition tax credits, vouchers, charter schools, etc.), more would be motivated to take an interest in getting Junior to show up to class. Then again, maybe Junior would have more interest, too, once dropping out is not the only alternative to escaping the government school monopoly.

Labels: Charter schools, Education

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Wisconsin Needs Tabor
Charles J. Sykes offers a solid introduction to the effort to bring a Taxpayers Bill of Rights to Wisconsin.

Writing in Wisconsin Interest (PDF file), he concludes that "Similar proposals have been around for years, until now generating little momentum. But last year’s debate over the property tax freeze and rising evidence of a tax revolt seems to have galvanized support behind a broader, more comprehensive, and permanent solution to Wisconsin’s chronic addiction to taxation and spending."

For the critics, Sykes points out that TABOR, by allowing for a popular vote to allow governments to retain money over the limit, is less strict than last year's proposed freeze.

Among the difficulties in Wisconsin: the measure has to be approved not only by a popular vote and the legislature, but by two legislative sessions.

In a survey conducted last year, 82 percent of Republicans and 67 percent of Democrats said they would support something like TABOR. Expect those numbers to decline as the proposal gains legislative momentum ans the attacks on the measure begin. (permalink)

Social Responsibility of Business and Subsidiarity
Many corporations try to win warm-and-fuzzy images in the public mind by touting their charitable efforts. But as the saying goes, charity begins at home.

In the early 1970s, Milton Friedman wrote a seminal article titled "The Social Responsibility of Business Is to Increase Its Profits." This echoes what he wrote in Capitalism and Freedom some years before: "In such an economy [i.e., a free economy], there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud. Similarly, the 'social responsibility' of labor leaders is to serve the interests of the members of their unions." (Chapter 8, "Monopoly and Social Responsibility," the first paragraph of the section titled "Social responsibility of business and labor.")

I thought of this line of argument after I heard yet another company boast, in a radio commercial, that it was "giving back to the community"--as if its products and services offered freely for sale were not already "giving to the community."

Friedman points out several problems with the "social responsibility" model. "Can self-selected private individuals decide what the social interest is?" Who elected Ted Turner or Robert Murdoch as the arbiter of the social interest? Further, warns Friedman, "If businessmen are civil servants rather than employees of their stockholders then in a democracy they will, sooner or later, be chosen by the public techniques of election and appointment," with all the attendant troubles.

He also addresses the question of charitable activities, arguing that they are an inappropriate use of shareholder's money. "If the corporation makes a contribution, it prevents the individual shareholder from himself deciding how he should dispose of his funds." Indeed. One can also make the same argument about government-funded social works. Given the choice between giving money to Habitat for Humanity and giving the money to HUD, I would ... Oh wait, I don't have that choice--at least for the money that goes into the federal treasury.

Another problem with the shareholder responsibility model is that it understates the importance of dispersing authority within society. Just as civil power is distributed among the federal, executive, and judiciary at the national level, there is also a distribution of power among state and national governments.

Equally important for a free society is the distribution of all kinds of power -- cultural, economic, civil, religious -- among various institutions. Governments should not be running businesses, schools should not engage in moral teaching contrary to the views of parents (separating morality from education is a difficult task), businesses should not be running charitable foundations, and so forth.

Consistent with this thinking is the Catholic thinking of subsidiarity. Says the Acton Institute, "nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organization. In other words, any activity which can be performed by a more decentralized entity should be."

From the Protestant side of Christianity, we have sphere sovereignty, which the Acton Institute (again) summarizes this way: "the family, the business, science, art and so forth are all social spheres, which do not owe their existence to the state, and which do not derive the law of their life from the superiority of the state, but obey a high authority within their own bosom; an authority which rules, by the grace of God, just as the sovereignty of the State does."

I've spent too much time on this entry, so let's jump a few paragraphs to my own conclusion: "federalism" is good. Let's not limit its application to politics. There's a place for government, but government should be in its place. The same can be said for other important institutions. Of course, where and how these spheres intersect, well, that's when the sparks fly. (permalink)

Just Say No to Broadband Subsidies
Broadband may be more expensive in rural areas, but that's no excuse for government subsidies for rural users, says Alan Murray, writing in yesterday's Wall Street Journal.

"While broadband use is more common in cities and suburbs, it is spreading rapidly. Rural users may have to pay more, but so what? The government doesn't intervene to ensure I can buy a house in Washington, D.C., at Montana prices. Why should it intervene to ensure Montanans can buy broadband at Washington, D.C., prices?" (permalink)

Why Can't Illinois Be Like Florida?
Illinois should be more like Florida, says Illinois Policy Institute director Greg Blankenship. Governor Blagojevich hasn't enacted a broad-based hike in the sales and income tax rate. That's the good news. The bad news: state spending has doubled every decade for the last three.

Blankenship notes that Florida, with a larger population than Illinois (six million people more), spends less than Illinois. The key to fiscal health, he argues, is not mindless across-the-board cuts, but cutting off programs that don't work. (permalink)

Consumer-Driven Health Care Gaining Strength
Your employer is going to cut back on the insurance plan he offers you. How would you like to use the opportunity to gain some financial advantage and control over your health care decisions?

The cover story of Fortune Small Business is about Affordable* Health Care. And as the note for the asterisk explains, "that's no typo." Health care can become affordable to more people, if we change our model of financing it.

The problem of insurance costs is particularly important to small businesses; the smaller the size of a company, the greater its premium increase last year. (For firms with 200-999 employees, 2003 premium increases were 12.4 percent. For firms with fewer employees, the increase was 15.5 percent).

So what to do? More "and more entrepreneurs are turning to consumer-driven plans, which typically combine a high-deductible health insurance policy and a tax-advantaged, employee-managed medical account that covers some or all of the deductible. Any money left in the account at the end of the year generally rolls over to the next year, an incentive for employees to spend prudently."

The number of people in these plans is growing, jumping from 100,000 to 500,000 in just 2002 to 2003. Still, that's barely over one quarter of one percent of all people with insurance. There's still a lot of change awaiting, then.

Critics argue that companies are using consumer-driven plans as an excuse to cut down on their spending on insurance. True enough. But they're going to get their costs under control in some way.

One way is to cope by keeping the status quo: increasing employee share of premiums, raising co-pays, deductibles, and co-insurance amounts, or simply laying off employees to account for ever-increasing compensation costs.

Another way is to move towards consumer-driven plans, which put employees in charge, and give them incentives to shop and live wisely--and perhaps accumulate a small fortune in the process.

Which would you choose?

Labels: Health care

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That's One Way to Save Money
Driving in Illinois, I stopped in a rest area to pick up a state map. There were lots of tourist brochures around, but where to find a simple map?

Finally, I gave up looking on my own, and walked over to the woman working the counter. Another motorist had just asked her for a map, and I then got my own copy from her.

Now, I know that Illinois has a budget problem, but are things so bad that they are rationing maps? Perhaps the state could save some money--and perhaps improve customer service--by privatizing rest areas.

Come to think of it, Illinois does something like that on the tollway system. The "Oasis" stops along the Chicago-area tollways are in effect rest areas, offering gas from Mobil, hamburgers from McDonalds, and so forth. But it seems (I have not observed all of them) that someone decided to close them all for renovation--at the same time. (permalink)

In Praise of Jobs Destruction--and Creation
Do you want full-time employment for all, with job security to boot? Try digging a canal by hand, suggests one economist.

Increased productivity, a key to the economic recovery underway, "saves labor." At the same time, it destroys some jobs. Undoubtedly that creates hardship. But job destruction is vital to job creation--and economic and social progress.

"If we sacrificed this dynamism in an attempt to preserve jobs starting in 1950, we would still be listening to our music on turntables, and using typewriters and carbon paper. If we started to 'preserve jobs' before the Industrial Revolution, most of us would still be on farms in families with high mortality rates. " (permalink)

In Praise of the Temporary Job
Temporary and contingent employment gets a bad rap. AOL turns some contractors into employees--and one former contractor laments the change.

"With so many people moving in and out of the jobs, they became quite well known among the more lowly denizens of New York's media universe. They were the perfect fallback position, something with a good hourly wage and sufficient flexibility to allow for your freelance pursuits, a way to keep the income flowing after your dotcom or startup mag or whatever else folded."

The "elegy for a temp job" includes a few amusing (and sad) examples of how fear of lawsuits drives companies to draw a bright line between employees and contractors: "One winter, email invitations to the company Christmas party went out to the D.C. office. The sender included the office's temporary staff on the list. Within minutes a second email came around, this one stating explicitly that contract employees were not invited to the party."

As I read further into the article, I came to the conclusion that perhaps the author was not the sort of person that you would want to have as an employee. All the same, it's an interesting demonstration that flexibility in the workplace has its benefits. (permalink)

If Due Process is Good Enough for Murder Suspects
During a 7 hour drive last week, I saw more than one motorist (not me!) pulled over by state highway patrols. It's easy to think of lawyers who work in traffic cases as letting the guilty go free.

Web sites and books will give you any number of ways to question the validity of a speeding ticket. Question the validity of the certification of the officer to operate the radar detector. Question the calibration of the detector. And so forth.

Merely gaming the system to avoid all-but-certain punishment? Sometimes, undoubtedly, though there are certainly other times when the equipment is not working right, or when the police nab the wrong person.

Even so, however, it's not uncommon to let rapists, murderers, and assorted thugs go free because of some "legal technicality." It's the price we pay, it's said, to make sure that due process is the rule of the day.

If that's so, how much less objectionable should be the use of every legal defense available to the motorist pulled over for going 80 in a 70 m.p.h. zone. (permalink)

Government Management: More Rigid, Less Responsive
Government bureaucracies, by their nature, tend to be slower-moving and less responsive than private-sector counterparts. Airport screening is just the latest example.

The Wall Street Journal reports that waits at airports will be up this summer over last year. Among the reasons: increased traffic, and the bureaucracy of the relatively new TSA, or Transportation Security Agency.

"Carriers typically rely heavily on part-time workers to boost peak-period staffing in everything from ticket counters to baggage handling," the Journal article notes. "But TSA has taken a more-rigid approach, maintaining the same staffing in the summer as in slower travel periods."

To add insult to injury, "some airports have 100 or more vacancies that remain unfilled, despite available funding." (permalink)

How Do I Tax Thee? Let Me Count the Ways
The Oklahoma Council of Public Affairs has put together a list of federal and state taxes. It's an amazingly long list.

If you don't live in Oklahoma, you'll have to find someone else to compile a list of the taxes levied by your own state. But the Sooner State's list should be illustrative in any case. (permalink)

Ignorance Drives Disdain for Health Savings Accounts
The attempt to move health care out of the bureaucratic, government-directed world into the realm of market transactions faces many obstacles, including much faulty thinking on the subject. David Hogberg takes on the Des Moines Register, and refutes that paper's skepticism on health savings accounts.

The Register doesn't like the fact that HSAs are not a comprehensive approach to health care financing. But that's exactly the point, says Hogberg: "If it functioned like a true free-market, health-care consumers would have many different options to choose from when deciding which health insurance to buy. That’s how it works in a true free market: consumers have options."

Another criticism of HSAs: they take healthy people out of the insurance pool, and thus drive up costs for everyone else. But as Hogberg says, that just isn't so: an HSA must be accompanied by an insurance policy (so much for leaving the pool). PLUS, more people are actually getting insurance--enlarging the pool--thanks to these relatively new arrangements.

Labels: Health care

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School Choice Constitutional? Of course
Despite a recent Supreme Court ruling on the subject, many people may still think that vouchers or tuition tax credits for private school enrollment are unconstitutional.

The Josiah Bartlett Center of New Hampshire has released a new report on the subject. School choice, it says, conforms to both the U.S. and to the New Hampshire constitution.

(A version of the report, in PDF, is here.)

The review of court opinions and rulings also includes a brief review of the Blaine Amendment. This amendment, found in most state's constitutions, was an attempt by Protestants to maintain their control of government schools in the face of an increasing population of Catholic immigrants.

One interesting fact I didn't know: the Blaine amendment became incorporated into federal law governing the admission of states into the union.

Labels: Education, School choice

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Finally, Good News from the Alumni Magazine
Today's mail brought a copy of my college alumni magazine--and an unusual amount of good cheer.

Normally browsing through alumni magazines is an exercise in despair, as one encounters college presidents more interested in bowing to the gods of political correctness than in upholding academic standards or anything, in the face of the nihilism that clouds the academy through its distortion by postmodernism.

But today's review, as I said, brought some good cheer, especially helpful in these days when I wonder about ability of western civilization to stand up to itself, intellectually speaking. (I'm sure I would have been a pessimist had I been of age during the lead-in to World War II.)

As an undergraduate student, I spent some time in Normandy, France. I knew of its historic significance, of course, and even visited an American cemetery there. But I had forgotten that during my stay there, I had contact with a war hero. Andre Heintz was the local university official who dealt with students with my college. It turns out that he gets some mention in a book on D-Day by Stephen Ambrose. You can read about him in this book excerpt at Amazon. It doesn't say much about Heintz, except that he sent, by radio, some information of military value to England. Ambrose concludes this section of the book by saying that thanks to Heintz and others, the liberating forces "had better information on the enemy dispositions and strength than any attacking force in history." (permalink)

What's Driving the Sexualization of Childhood?
Puberty is coming earlier and earlier to a girl near you, says The Rake magazine. What are the social implications, and why is it happening? It's an interesting read.

Among the possible causes: obesity and broken homes. Among the problems caused by this: children who are more likely to be "depressed, aggressive, socially withdrawn, and to experience sleep problems and obsessive behavior," which may, among other things, lead to more social (and hence, policy) problems. (permalink)

Day Care: Teachers or Babysitters?
Critics of institutional day care say that it's merely group babysitting that harms children; defenders say that it is not "mere" babysitting; it's "school," with professional "teachers." So which is it? This question came to the fore in a discussion of new rules for overtime pay.

U.S. Secretary of Labor Elaine Chao recently appeared before a congressional committee to defender her department's revision of federal rules governing what and who qualifies for overtime pay.

A former Labor Department official brought to testify by Democratic members of the committee criticized the proposal for, among other things, taking away overtime rights from "nursery school teachers." Karen Dulaney Smith argued that they should be given overtime pay "because their job does not require the use of independent discretion and judgment." (If the job does meet this standard, that's one reason why it may be "non-exempt," or entitled to overtime pay.)

So which is it? If these workers are professionals who exercise independent judgment, then they probably don't get overtime pay. But if they aren't professionals, doesn't that mean that critics of day care are right?

Labels: Education

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