Live Blogging the Debate.
Some folks do a good job of writing entries in a blog during a speech. It's called "live blogging." I am trying to do this over at the Detroit News tonight, but I have to admit I'm not one of those people. I'm going to have to read the transcripts afterwards, and try to take fewer notes now.

Meanwhile, check out Powerlineblog, Shotinthedark, and SCSU Scholars for real-time feedback. Also present for various parts of the evening: James Lileks, and the publishers of OurHouseBlog, Fraters Libertas, Jo's Attic, and What If? (permalink)

Destroying the Market for Individual Health Insurance.
One way to promote government-run health insurance is to destroy the market for individual insurance, complain that there is no place for people to go, and then offer a government program as a solution.

That cynical ploy may or may not have actually been executed, but things have played out as if that was the case in several states. I've already written about this topic in Maine.

Conrad F. Meier offers an updated and extended examination of the situation in Maine. In addition, he discusses 7 other states in which the market for individual insurance has all but disappeared to a combination of factors, including various forms of regulation.

Labels: Health care

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The Blue-Light Special Going Down to Georgia?
Michigan and other rust-belt states have long suffered a slow exodous of manufacturing jobs in which the pay rates exceeded the amount justified by worker productivity. In other words, jobs moved to the south, where cheaper wage rates overcame any productivity that may have been lost in a move. (High pay is not a problem if it's backed by high productivity.)

Now it looks like the same thing may happen with back-office jobs, too. Well, at last one company is plotting a move south. K-Mart, with headquarters near Detroit, may decamp to Atlanta.

Look for officials in both Georgia and Michigan--but especially Michigan--to offer various forms of corporate welfare or industrial policy (grants, special tax breaks) to gain, or retain, big K. (permalink)

Part-Time Legislature, Anyone?
From the western reaches of Michigan's Upper Peninsula, to Detroit? Joe Karius, publisher of the Ironwood Daily Globe, calls for a part-time legislature.

Michigan and neighboring (if you're in the U.P.) Wisconsin are two of just a handful of states with a full-time legislature.

Karius cites not only the expense of legislators (in Wisconsin, the going rate for a legislatore is $45,000 a year for salaries alone, not to mention per diem pay and up to five staffers).

He says "With the legislator job part-time, the office-holder would still have to hold a job in the real world, giving him or her a better idea of the impact of too many laws of just plain stupid laws."

Put this question on that list of "I would like to look at some research into this question, but it looks like a good idea" policy ideas.

But I doubt that any state that has gone from a part-time to a full-time legislature has ever gone back. If anyone knows otherwise, please drop me a line. (permalink)

The End of Eminent Domain Abuse May Be at Hand.
Michigan's supreme court ruled against governments that wish to take property from one private party and give it to another, all in the name of some public good. (The public good usually turns out to be a government-directed economic development effort, or lately, simply more tax revenue.)

While the Michigan ruling is a powerful symbol for others to look for, the final word on legal matters lies with the U.S. Supreme Court, which has decided it will hear a related case on the question. Chip Taylor has the links. (permalink)

When Two Billion Dollars Isn't Enough.
If money alone was the solution to improved school performance, the Kansas City, Missouri district would be churning out Nobel prize winners.

You've missed the awards show? That's because even $2 billion won't cut it, if it's wasted through bad incentives. And as I argue for the Flint Hills Center for Public Policy, it was.

Labels: Education

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Use of Employer-Paid Insurance Continues to Decline.
When people lose their jobs (common during a recession), they lose health insurance. But lately, during renewed prosperity, it's not unheard of for people to lose insurance as well. Companies look for ways to remain profitable, and health insurance, with its double-digit increases year after year, is one target.

Medical Progress Today (can you see that I'm catching up on some reading?) summarizes a recent article on the subject from the Center for Studying Health System Change:

The Center for Studying Health System change has found that the number of Americans with employer-sponsored health insurance declined 4 points from 2001 to 2003 (from 67 percent to 63 percent). This translates into nearly 9 million Americans who lost their employer sponsored health insurance.

Our health care system is in crisis because the people who use it are isolated from its costs, and therefore have no incentives to economize on treatments and no leverage to demand better patient care. The situation is further aggravated by the fact that both states and the federal government have inundated insurance markets with regulations that make insurance vastly more expensive. As a result, quality is poor and yet costs still spiral out of control.

These problems are endemic to third-party insurance systems, and won't abate until we place more responsibility for health care decisions with individuals, as opposed to employers or the federal government.

Labels: Health care

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Government Health Care Spending Will Go Up--No Matter What.
Joe Antos, of the American Enterprise Institute, looks at the two major presidential candidate's plans for health care. He concludees that federal spending will go up: $1.5 trillion for Kerry, $128.6 billion for Bush. Both numbers are calculated over 10 years. (permalink)

With the Explosion of Choice, Why Government TV?
No, I'm not talking about PBS. The same question is being raised in Great Britain, where the BBC is coming upon its once-every-ten-years renewal period.

Not only is its role increasingly unnecessary (if it ever was necessary), but it is now becoming a taxpayer-funded enterprise that competes against private businesses.

Taxpayer TV faces an inevitable problem. If it sticks to a limited, core set of offerings, it's likely to continue to depend on involuntary contributions. If it expands into commercial activity (licensing fees, etc.), then it becomes a commercial competitor with an unfair advantage. Mission creep has already afflicted the BBC, which now has multiple TV and radio stations.

(Source: Today's Wall Street Journal.) (permalink)

If at first Johnny Doesn't Learn, Pay, Pay Again.
In case you think there's nothing wrong with K-12 education in this country: "Nearly two-thirds of 2004's graduating high school seniors now enrolled in Houston-area community colleges are taking remedial classes because they weren't prepared for college." So says the Houston Chronicle in a back-to-school story.

Community colleges are known as the place to "catch up," but why do we need a post-secondary educational system to make up for the deficiciences of the k-12 system? The answer: lack of competition in k-12 schools promotes mediocrity--or worse.

The problem of ill-prepared students is not limited to community colleges, though. It shows up in the workplace, and in four-year colleges as well.

Four years ago, one study attempted to calculate the economic cost of the need for remedial education: $16 billion. That's probably on the conservative side. I wonder what it is now.

Thanks to Milt Rosenberg, a retired university professor, for the tip. His observation: "All veteran teachers of college undergraduates (like the proprietor here) will not be surprised."

Labels: Education

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A Great Resource for Tax Limitation Laws, State by State.
Regular readers of this site know that the PolicyGuy is a fan of tax and expenditure limitations. The Public Interest Institute has a fine collection of the various measures (some quite useful, others less so) in the various states. This section features excerpts of the relevant constitutional or statutory laws. So if you're interested in the details of such things, take a look. (permalink)

Who's that Working With Your Child's Teachers Union?
Why, it's MoveOn.org, that organization that (in)famously compared a U.S. president to Adolph Hitler.

And what was the big hit at the annual convention of the National Education Association (your teacher's union, most likely)? An inflamatory mock documentary by Michael Moore.

Cheri Pierson Yecke, the former education commissioner of Minnesota, has the goods, and reports on the serious business of education--promoting accountability and responding (pdf file) No Child Left Behind (permalink)

Why Are Academic Journals So Expensive?
A professional acquaintance has recently been published in the Journal of Austrian Economics. Abstracts are free, but it appears that the articles are limited to subscribers only.

As someone who gets paid for writing, I don't mind. Then again, I can't get an individual subscription to the online version, and the paper version is $380 a year.

With universities almost by definition leading the way in access to the Internet, why do we even have paper versions of academic journals anymore? Perhaps elimiating the need for paper, a circulation manager, and so forth, would make academic journals more affordable.

Then again, so many journals are unreadable that a good shaking-out, should that somehow be achieved, may just what academic publishing needs. (permalink)

With Gun Use, Good News is No News.
News, almost by definition, talks only about bad things that happen. But such a tendency leads to misinformed opinions that slant public opinion--and perhaps policy as well. So contends John Lott, who argues that the use of guns is mentioned in the media only when the guns are used to commit a crime, not to defend against or prevent one.

(The above link is to the current screen shot of Imprimis, a monthly publication. After September, you'll have to search in the archives for the September 2004 edition.) (permalink)

Autos: The New Axles of Evil.
A certain segement of the environmental movement, along with some urban planners and community activists, don't like cars or highways. (Says one noted author: "I believe in no more highways.") They don't want you to like cars, either, preferring instead that you take light rail, subways, or the bus, and live in densely-populated townhouse developments.

There are, of course, several innovations that could improve highway travel--computer-controlled cars that could triple road capacity and variable-rate tolling to smooth out traffic congestion to name just two--raise political rather than technical opposition. Why? Call it fear of the "axles of evil."

John Tierney, a staff reporter for the New York Times, doesn't especially enjoy cars. Now, he says "I no longer believe that my tastes should be public policy." Why? he was convinced by critics of "smart growth" and other efforts to restrict or otherwise downplay the role of cars.

Social and environmental problems caused by the car, he says would be made worse by most proposals of the car skeptics.

"The car is not merely a convenience but one of history's greatest forces for good, an invention that liberated the poor from slums and workers from company towns, challenged communism, powered the civil rights movement and freed women to work outside the home."

Other items of note from the article:

• Given a choice between equally-priced homes, 83 percent of Americans choose the suburbs.


• A super-high gas tax won't stop population shifts to the suburbs. At least this has been the case in Europe: "Even with $5-per-gallon gasoline, the number of cars per capita in Europe has been growing faster than in America in recent decades, while the percentage of commuters using mass transit has been falling. As the suburbs expand, Europe's cities have been losing people, too. Paris is a great place to visit, but in the past half-century it has lost one-quarter of its population."


• Traffic congestion has become worst in cities (New York, Chicago) that have population densities approaching those favored by "smart growth" planners.


• More people work in the 'burbs than in the center city--and commute from suburb to suburb. (Yet much transit is oriented in the suburb-to-city route).


• The alleged increase in commuting times is vastly oversold: "The length of the average commute, now about 25 minutes, rose just 40 seconds in the 1980's and about 2 minutes in the 1990's."


• Are we "paving over paradise" for parking lots? Not quite. "The major change in land use in recent decades has been the gain of 70 million acres of wilderness -- more than all the land currently occupied by cities, suburbs and exurbs."


• Is transit the cure? Not quite. Only percent of all urban commuters outside New York use transit--which takes twice as long on a per-trip basis than cars. Looking to transit is expensive and ineffective: "even if Congress miraculously tripled the annual subsidy for transit, the average driver's commute would be reduced by a grand total of 22 seconds."


• Which form of transportation is most heavily subsidized? Transit, which costs four times as much as trips by auto. Transit riders pay only one quarter of the cost. By contrast, drivers pay 19 out of every 20 cents for roads. Even if the loosest definition of the costs of automobile use are used, trips by car still cost only half as compared with transit.


• Is building new roads only a sucker's game, as posited by the theory of "induced demand?" No. "A new freeway does indeed attract new drivers, but that doesn't mean it's not worth building. Besides benefiting those drivers (no small thing), it eases the strain on the road network."


• Are toll roads or toll lanes only for the rich? "[E]ven drivers who won't pay the toll have come to appreciate the lanes because they divert traffic from the regular highway. And while affluent drivers are more likely to pay the bill, surveys have found people of all incomes using the lanes." And say that only "the affluent" pay the tolls, you've got to like that if gouging the rich is your thing. Everyone else gets to use (at no extra charge) roads that now have fewer cars on them.


• The "smart growth plus transit" approach lies in a blame-the-victim mentality. "After decades of working on technological fixes like beam-control roads, [traffic engineers have] turned to basic economics instead. They now see traffic jams as the equivalent of bread lines in the Soviet Union, a consequence of an unimaginative monopoly run by politicians loath to charge the market price for a valuable commodity. To be fair to the Soviet politicians, though, at least they didn't blame the public for the problem that they created. They didn't promote a smart-diet program urging people to eat less bread."


• The campaign against the car, and suburbs, has a social-class feel to it: "Intellectuals' distaste for the car and suburbia, and their fondness for rail travel and cities, are an odd inverse of the old aristocratic attitudes. The suburbs were quite fashionable when only the upper classes could afford to live there. Nineteenth-century social workers dreamed of sending crowded urbanites out to healthy green spaces. But when middle-class workers made it out there, they were mocked first for their ''little boxes made of ticky-tacky'' and later for their McMansions. Land Rovers and sports cars were chic when they were driven to country estates, but they became antisocial gas-guzzlers once they appeared in subdivisions."

I've not written much about transit--after all, there are so many other interesting areas of public policy, such as K-12 education, health care financing, and taxes, among other things. But this Times article pretty much covers the major points of the transit / housing / smart-growth debate that I have seen.

Labels: Transportation

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School Board Self-Help.
That's the title of my latest piece for the Mackinac Center for Public Policy. It's about the practice of holding school board trade meetings (yes, there are such things) are world-class resorts. Even as school boards call for more money, they live pretty well at conferences.

Granted, the money spent at shingdings held by the Michigan Association of School Boards, though significant as a raw number, is only a symbolic amount of the total money spent on K-12 schools. Yet symbols are powerful because they pack "signals" into a small package.

My line that I forgot to put into the essay: a board member who said something like "For a resort, I don't think we paid too much."

Labels: Education

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Is Anything Beyond the Scope of Government?
At a time when government agencies are having a difficult time getting everything done that they should (by mission statement, at least) do, they keep trying to do more.

The Texas Department of Transportation wants to set up free wi-fi Internet access at 96 rest areas. People wanting a wired connection will have to pay their own freight. Perhaps these wired folks will cover the costs of the the entire operation, wired and wireless. But that's not clear from what I can tell.

A department spokesman said "We think this will be a huge win-win for Texas’ travelers. Knowing free Internet service is available at our rest areas will get drivers to make regular stops. Since fatigue is a factor in 1.5 percent of all crashes, anything we can do to get people to pull off the road and take a break is going to make our highways safer."

When you consider what's available on the Internet, next thing you know we will hear complaints that some people are using their free access to download porn, up to and including its most vile forms. Or perhaps someone will set up a spamming operation. Or any number of other illegal or unsavory actions sometimes taken online.

Blogger Richard Wiggins offers a few more questions:
-- What if those truckers stay up all night in chat rooms instead of resting?
-- What if um, professional services folks use the Internet to meet clients?
-- What if those without an ISP set up camp and never leave?

Iowa, meanwhile, will let a vendor test the use of wi-fi at 3 (and as many as 40) of its rest areas. The vendor's got the right idea: "We don't want people saying, "Hey, that's kind of cool, but why are my taxes being used for this?" Indeed. The vendor, I Spot Network, hopes to turn a profit by selling advertising on the connections.

Apparently Maryland is taking the trendy approach, a state officials saying "If they can go online while they travel it's a convenience for them and it ties in with Maryland's strategy of being a leader in technology." At least they plan to recoup the cost of buying a connection--though it raises the question of why state government is taking over something that is placed and financed by private vendors every day.

Truckstop.Net is an example of how the Internet can be delivered along roadways without government action.

Labels: Transportation

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War Hero. School Thug. Same Difference?
The school board in Port Washington, New York, recently discussed whether to rename a school building after Pfc Douglas T. Jacobson, a war hero (Medal of Honor, World War II.)

With the nation at war--and Port Washington (being on Long Island) not that far from Ground Zero, you might think this is a good idea.

Then again, you might not. One board member expressed reservations. In the words of a news account, "he felt conflicted because the district just suspended several high school students for violence, and he was hesitant that students might interpret renaming the school as the administration's condoning violence."

Sounds like something for the people at Zero Intelligence to take up.

It's things like this that make me wonder if Americans are up to defending themselves.

Labels: Education

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The Folly of Sports Subsidies.
What kind of business is most likely to be subsidized by taxpayers? If you said sports team, go to the head of the class.

It's not only major league teams get sweetheart deals on stadiums. Greensboro, North Carolina incurred over $375,000 in losses to subsidize the Greensboro Generals, a minor league hockey team, during the last season. Fortunately for taxpayers (and peddlers of unsubsidized entertainment), the East Coast Hockey League owners voted to kill the team's membership in the league. (permalink)

More on the Medicaid Mess.
Nationally, the 800-pound gorilla of endangered government programs is Social Security, which faces a bleak fiscal future, given economic and demographic realities. (Medicare is even more of a problem, but it doesn't get much attention--except when Congress and the president are making things worse by adding even more entitlements.) At the state level, the 800-pound gorilla is Medicaid, the program for the real, and (sometimes) artificially poor (think of people who shield assets so that they can get taxpayers to fund nursing home stays of relatives.)

Not only is Medicaid usually the leading, or second leading budget item for most states, its costs have soared in recent years. States have tried to have it both ways, gaining political points for expanding the number of people and services offered, while financing the program either through lobbying Congress for more money, or stiffing medical professionals with reimbursement levels so low they would make you laugh--if under-paying was a laughing matter, that is. Oh yeah, do you think that a bureaucratic-driven, on-the-cheap program gives great care to those enrolled? All around, then, it's a program in need of a lot of reform, for all concerned: beneficiaries, medical professionals, and taxpayers.

The free-market policy community is coming up with a number of innovative recommendations. The latest comes from the Texas Public Policy Foundation. Here's their report, in a PDF format.

Labels: Medicaid

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TABOR Fever Spreading.
TABOR fever is spreading, and that's a good thing.

No, TABOR is not a new tropical illness. It is an acronym for the Taxpayers Bill of Rights, a measure enacted in Colorado over a year ago to, well, you know, give taxpayers more rights (or more accurately, power) to control government spending.

The measure has been disussed, in various forms, in many states now. One of the latest is Maine.

Meanwhile, the Colorado-based Independence Institute remains one of the leading enthusiastic backers of the measure, with a number of reports and commentaries available here. (permalink)

Tax Increment Financing (TIF)? No, Thank You.
North Carolina may enact a measure this fall to allow local governments to raise taxes without public approval--if the taxes are used for tax increment financing (TIF) districts.

According to TIF critic Scott Mooneyham, a serious problem with TIF projects is the inability of local officals to spot what will and won't work when it comes to development (the old knowledge problem):

One of the big selling points that supporters of tax-increment financing talk about is that the projects won’t raise property taxes. Instead, local governments will establish special finance districts in which the additional property taxes created by new developments will go to pay off the public improvements.

Technically, they are right. But their logic depends on smart decisions by local government officials about what kinds of projects to allow or not allow using the financing. (permalink)

Drop in Employer-Sponsored Care Calls for Personal Health Markets.
Speaking of health insurance, I make a (brief) argument about necessary health care reforms in the Detroit News here and here.

Labels: Health care

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Develop a National Market for Health Insurance.
Since the whole idea of insurance is to pool risks, why not have a national market for health insurance? That way, the financial cost of the ill is spread out across the much wider number of healthy individuals?

The ideas has been floated from time to time, first by think tanks, and most recently by President Bush.

There's only one problem: state governments are loathe to give up control over health insurance regulation. They say that without state oversight, consumers will lose valuable "protection." But as I have argued (the following files are in PDF) regarding guaranteed issue and mandated benefits, state regulations are part of the problem, sometimes killing off segments of the insurance market. They are not the solution to increased access to health care coverage.

Labels: Health care

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Teachers Union: No to Private Schools. Teachers: Yes to Private Schools.
The Thomas B. Fordham Foundation is out with a new report (PDF version)on where public school teachers send their own children.

The Washington Times provides a quick summary: "Nationwide, public school teachers are almost twice as likely as other parents to choose private schools for their own children."

Maybe they know something the rest of us don't. After all, they are, as Fordham puts it, acting on "insider information."

Labels: Education

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The Public Supports Vouchers--and Opposes Them.
That's the conclusion of Andrew Coulson found by looking at two surveys.

Survey one: "Do you favor or oppose allowing students and parents to choose a private school to attend at public expense?" A slight majority were opposed.

Survey two: "Do you favor or oppose allowing students and parents to choose any school, public or private, to attend using public funds?" Almost two in three said yes.

Obviously someone could point out methodological questions: was the wording slanted, did the other survey questions lead people in one direction, was the sample representative, and so forth.

But Coulson argues that "dramatic swings in public support for school choice can be traced largely to a single factor: fear of the unknown."

Fortunately, school choice is not an unknown; there's a long history of it in the Netherlands, and other countries.

Labels: Education, School choice

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Everything I Know About State Public Policy I Learned in Elementary School.
John Hood, president of the John Locke Foundation, says that some simple principles can go a long way to making for sound public policy:

• Stop mixing up government and business
  
• Use benchmarks, particular regional neighbors
  
• Set firm priorities
  
• Seek balance in higher-education funding
  
• Reorganize state government
  
• Stop digging holes (debts sold as non-debts).

Though Hood writes writes with a North Carolina audience in mind, the ideas have wide applicability. (permalink)

Is a "Creative Place" a Boon to Economic Development?
New theories in economic development suggest that metropolitan areas need to attract the "creative class." Steven Malanga is not impressed at the theories of Richard Florida, which are often characterized are characterized as a "bikepaths and bars" strategy to development. In his defense, a professional colleague of mine, who is familiar with the literature, says that Florida's work has been stretched by urban planners beyond what Florida meant. (permalink)

Consumers May Gain More Control Over Health Care Dollars with FSA Changes.
In an arrangement called a Flexible Spending Account, "When you sign up, generally through a regular payroll contribution, your boss puts the amount you select into a personal account for you to use to pay for medical expenses or dependent care costs not covered by insurance."

That's the good news--as is the fact that the money you put in there goes in tax-free. But the major problem with FSAs--one reason why they haven't caught on as much as hoped--is the "lose or use" proposition. Money put into the account in one year must be spent that year. If you don't spend it by the end of the year, you lose it. It's hard to set aside money for an expense that has so much variability, especially when the penalty for miscalculation is (effectively) a 100 percent tax.

(The ability to roll money over from year to year is one very large advantage of the more recently developed Health Savings Accounts.)

Still, there are a lot of FSAs around, and the September 15 Wall Street Journal had an article on the subject by Tom Herman. Congress is debating whether to revoke the "use or lose" rule.

"An estimated 12 million to 18 million workers have Flexible Spending Accounts," says the Journal. The average contribution into such accounts is $1,136. Plans currently in place allow workers to put in anywhere from $3,000 to $5,000 a year. Considering that a family insurance plan can cost upwards towards $10,000 a year, there's clearly money there that could be put into such tax-sheltered accounts, if the rules provided the right incentives. In the coming years, we may (I hope) see an explosion in the number of people with Health Savings Accounts, which do have the right incentives.

It's time, for a variety of reasons, for people to take back from their companies the way that we finance health insurance. The current method of tying insurance to employment inevitably leads to less insurance coverage in times of layoffs.

Labels: Health care

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Drug Importation Forum in Maine.
The Maine Public Policy Institute recently held a forum discussing the latest chimera posing as a solution. Prescription drugs are expensive; they cost less in Canada, so why not import them? Isn't that what free-market advocates want, anyway, to use imports as a way of keeping inflation under control?

This is one of those issues where political reality obscures economic reality--even more than usual.

One response to the "let's get drugs in Canada" appeal is to argue that drugs arriving from up north are not safe. Well, yes and no. Sometimes they are fradulent and dangerous, but often they are the real deal. The upside of the safety argument is that safety is a viceral issue that nearly everyone can appreciate.

But the more serious problem is that the threat to public health posed by importation is a long-run risk. In short, we could end up making the discovery and production of new drugs financially unattractive. Importation of drugs from Canada is a back door to innovation-killing price control. I have always thought that this is the strongest analytical argument against importation, but it's also the hardest to sell to the general public. After all, plenty of faulty policies have traded long-term benefits for short-term gain on the flippant grounds that "in the long run, we're all dead."

Two newspaper articles on the web site of the Maine Public Policy Institute review the conference. The Portland Press-Herald says that "little was offered in the way of solutions at Thursday's symposium."

Given my knowledge of the participants at the conference, I doubt this is true. There are many possibile solutions. One, avoid making stupid decisions, such as give in to price controls. Two, take steps to reduce the cost of drug R&D (regulatory and tort reform come to mind). Three, if there is to be a welfare component, give vouchers to only those people who can't afford new drugs (rather than open up the price-control game to everyone). Four, take steps that promote consumer controlled health care, such as health savings accounts.

The Bangor Daily News, meanwhile, got the story of the conference more nearly right, I suspect, saying that the conference [to which I contributed some materials] "laid out a minefield of reasons why [importation is] actually dangerous and bad public policy to boot."

In a move not often heard in the debate, Brian Lee Crowley, an economist from the Atlantic Institute for Market Studies in Halifax, argued that one result of U.S. imports may be higher prices in Canada. In other words, the pursuit of cheaper prices through Canada may be self-defeating.

No matter how you look at it, importing "cheaper" drugs from Canada has some very high costs. (permalink)

Charter Schools: Better Than You Think.
Charter schools aren't the complete solution to school reform, and some are just plain bad. But here's the beauty: a failing charter school can be shut down much more readily than a traditional public school.

The Mackinac Center for Public Policy deconstructs some recent attacks on charter schools (attacks that, of course, call for returning to the old policies that lead to the creation of charter schools in the first place.)

Labels: Charter schools, Education

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FireFox Worth a Look for Heavy-Duty Browsing.
If, like me, you do a lot of Internet browsing, you may want to look into Firefox, a browser that's getting a lot of attention from computer nerds. And hey, maybe even public policy nerds.

What's nice about Firefox? Some people say that it is less vulnerable to viruses and other hijinks than Internet Explorer. That's the "eat your vegatables" argument--do it, it's s good for you, even if you'd rather not think about it. To continue the food analogy, here's the desert: Firefox supports tabbed browsing.

What's that? Think of it as windows within windows. I don't pretend to know everything about computers anymore, so I won't try to explain the technical details. Let's just say that it's now easier to have several web pages open at one time, and move swiftly among them. (permalink)

The Recession Hits Government Workers.
Minnesota Public Radio puts the "public" (as in "government") in radio in more ways that one. The other day it ran a piece on the fact that some Minnesota government employees have lost their jobs or are getting only modest pay increases.

"Judging from job numbers, government workers in Minnesota, especially those in local government, are in more of a recession than a recovery." So goes the introduction to a series of stories on the economic recovery, the object of which seems to find a dark cloud while everyone else is looking at the after-the-storm rainbow.

Granted, some government employees aren't doing as well as they used to. But then again, it's not unusual for employees in the private sector to foregoe pay raises--or even endure pay cuts when The Man's finances are doing badly.

The article also under-estimates the value of total compensation that public sector employees sometimes enjoy: more paid holidays, more plush health insurance plans (i.e., lower premiums and deductible), more job security, flextime (often not available in the private sector) and so forth. In detailing the plight of one teacher, MPR neglects to tell us that his district has also contributed $400 to a medical savings account, money that can easily be turned into cash.

My favorite story about "no pay increases," though remains one I once heard at a public hearing for a school district referrendum. One person advocated a tax increase, saying that the teachers had already done their share of suffering; they had not had a pay increase during the last contract.

Not exactly. As a further question revealed, many teachers DID receive more money based on "steps" on the pay scale that rewards longevity and number of college credits, rather than productivity. The pay scale itself had not changed, but many teachers had moved UP on the (stationary) pay scale. More money in your pocket? Sounds like a pay raise to me.

On a personal note, I've got nothing against government workers as such. I used to be one, in fact, so I know that many are hard workers, and just doing a job. (Others, of course, abuse their privileged positions.) Despite this, it is disturbing to see reports such as this one, that underestimate total compensation, and implicitly treat government agencies as if they were primarily job programs.

Labels: Health care

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Blogging and Hayek, Revisited.
The other day I noted a connection between the ideas of F.A. Hayek and the work at the blogging community at raising questions about CBS.

Today I noticed that uber-blogger Glen Reynolds had this one line entry: A Hayekian perspective on why blogging works. I thought he might be linking to me. Nope. But then again, Michael Van Winkle does turn a phrase in describing the phenomenon:

Klein misses the point that it's not whether you can trust some guy in his pajamas, but whether you can trust a spontaneous system of thousands of guys in their pajamas trading information and imparting small, sometimes deceivingly insignificant, bits of information.

What we've seen in the last few years is a gradual refutation of the Klein myth, that "Big Media" is more capable of sorting the truth than are 3,872,561 blogs. Slowly but surely a loose network of bloggers is sometimes beating the designed, controlled systems of checks and balances at deciphering what's true and what's not. This is exactly what Hayek would've predicted.

To repeat a theme, this lesson has application beyond the question of news distribution. (permalink)

Why Social Security Must Be Transformed.
Writing in today's Wall Street Journal, David Wessel reminds us of a simple demographic fact that dooms Social Security as we know it:

"In 1960, there were 5.1 taxpaying workers per Social Security beneficiary. Today there are 3.3. In 2030, there will 2.2"

A news story I read on the subject (too many) years ago had an accompanying cartoon to make this point. It was one of those "evolution of man" segments (you know, from knuckledragger to standing and walking upright, and confidently), only in reverse. The cartoon depicted a man walking, and carrying a backpack representing the number of workers whose taxes were required (after some leakage for government overhead) to support each retiree.

In the left of the cartoon--the early days of Social Security--the man is walking strongly, with a tiny backpack. His own share of the load was light. As you look from left to right, the backpack of each walker gets heavier and heavier, to the point where he can barely stand up.

Little has changed since the publication of that cartoon, save to raise the retirement age. But the flawed take-from-some and give-to-others model stands, as does (in the minds of too many) the (false) idea that each person actually has a Social Security account, with funds reserved in his name.

As for the so-called Social Security trust funds, it's been pointed out by someone whose name escapes me that neither the trust nor the funds in question actually exist.

It's time for a change. (permalink)

The "Memogate" of CBS Validates the Critique of Socialism and Central Planning.
In case you've missed the latest buzz in the world of news junkies, the reputation of CBS News may be under attack--from its own poor handling of a memo reflecting badly on George W. Bush's service in the National Guard. The episode also illustrates the limitations of government planning.

The memo in question gives strength to the accusation that Bush received favorable treatment in the Guard. But there's only one problem: it may be a fake.

Forget for now the question of what did or did not happen in the early 1970s--voters heard similar accusations in 2000, and voted in Bush anyway. What's more interesting is what happened after a CBS news show "broke" the memo story.

Several bloggers asked questions to nobody in particular, and their readers responded in great numbers with information that casts doubt on the authenticity of the memo. Now, it is widely thought (at least outside CBS) that the document is not the genuine article, but a poorly-made forgery.) Read John Fund, a political reporter from the Wall Street Journal, as well as Ed Carson of Investor's Business Daily to find out what happened. (The guys are Powerlineblog.com were among the lead investigators.)

Carson provides an analogy to the financial markets: "In the same way the market sifts and analyzes information stocks far better than any individual investor or institution ever could, the blogosphere weeds out the chaff and develops and hones analysis and facts at, well, Internet speed."

This reminds me of economic theorists, including Friedrich Hayek. Here's what Richard M. Ebeling had to say about Hayek's insight: "Hayek's particular and profound contribution to the debate over the feasibility of socialism was the following argument: that the more complex a society, the more difficult it becomes for a central planner to possess the required knowledge to coordinate all the economic activity of that society. In a system of division of labor, human knowledge is also divided. Each member of society possesses a small fraction of all the world's knowledge. And a successful coordination of all of these bits of knowledge, upon which the prosperity of the social order depends, is only possible through the use of market competition that transmits essential information about changing supply and demand conditions to every comer of the market through the price mechanism."

This division of knowledge, which makes central planning impossible, exposes the strength of the blogosphere--dispersed knowledge, not to mention frequent fact-checking. By contrast, the conventional media, with its far smaller number of staffers, is actually at a disadvantage. (permalink)

Don't Use These Words!
The always informative Garner's Modern American Usage warns against using the following terms of "commercialese":

acknowledging yours of
beg to advise
enclosed herewith
enclosed please find
further to yours of [date]
in regard to
inst.
in the amount of
of even date
pending receipt of
please be advised that
please return same
pleasure of a reply
prox.
pursuant to your request
regarding the matter
regret to inform
thanking you in advance
the undersigned
this acknowledges your letter
ult.
we are pleased to note
with regard to
your favor has come to hand
yours of even date

To paraphrase an old (19089) stylebook, you should usually ask "Would I speak this this way?" before you commit words to a business letter. If you wouldn't say it, you probably shouldn't write it.

For more tips on language usage, see http://www.oup-usa.org/mailman/listinfo/us-usage-l (permalink)

Why Does Your Boss Determine Your Health Plan?
Today I went to a conference on the economy and public policy. While I may not agree with everything the paper presenters had to say, I joined in when one speaker produced the only applause line in the day: "We have got to get away from tying health insurance to employment."

I suspect that some in the crowd would prefer that employer-sponsored insurance be replaced by national health "insurance" (it's not really insurance if the buyer--government--is the same as the provider). But at least it is a move to what, I hope, is making insurance portable, or something that people purchase free of third-party involvement, just like auto insurance, retirement, and, well, most everything else in life.

Labels: Health care

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Does Teacher Certification Matter?
Does teacher certification matter? Not really--at least in terms of producing quality teachers.

On the other hand, teacher certification requirements force many would-be teachers to waste a lot of time (and money) in their undergraduate schooling.

Says Andrew J. Coulson: "[Research]findings confirm the common-sense conclusion that more knowledgeable, eloquent people make better teachers. Unfortunately, instead of encouraging public school principals to hire the best communicators with the most subject-area knowledge, we forbid them from even considering anyone who lacks a teaching degree — even though teaching degrees don’t usually pay off in the classroom."

Labels: Education

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Smoking Ban Snuffed Out in St. Paul
For once, Minnesota political debates aren't about taxes (or the state-directed curriculum, a distant second). The issue of the last few months has been whether governments (city, county, state) will prevent consenting adults from engaging in ... smoking in public places. [Semi-obligatory disclaimer: I don't smoke, so I'm not trying to justify a personal habit. As for fat checks for being an apologist for the tobacco industry, they seem to be perpetually lost in the mail.]

The St. Paul city council recently enacted such a ban. However, Mayor Randall Kelly has vetoed the measure. The effects may not last very long, though--there's serious talk about a countywide ban instead. And that, in turns, brings us to competition among governments.

Sometimes the opposition to smoking bans is framed in terms of competitive advantages: "We can't do this; bars and restaurants in Springfield will suffer, because smokers and their dollars will go Shelbyville."

I suppose that's one argument. And in certain circumstances, it can be a useful argument. For one thing, it introduces a dose of economic reality (smokers like to go where they are welcomed), and anytime an argument is based in economic reality, that's generally a plus. For example, "[E]ven the staunchest opponents of smoking in Minneapolis, such as City Council Member Dean Zimmerman, say they're already considering revisiting the ban on smoking in bars in light of St. Paul's failure to follow its neighbors' lead," says the St. Paul Pioneer Press.

As well as the "we can't lose out by sending business elsewhere" argument plays, I wish that the more principled argument--nobody should have the right to use governmnent to tell a bar or restaurant that its customers and employees can't smoke--would gain more traction.

Why? There are two ways for a government to make sure that it's not at a competitive disadvantage compared with other units of government, be they cities, states, or even countries. One way is minimize the amount of government interference in the economy: cut taxes and reduce regulation, for example. Some call this approach (usually derisively) "the race to the bottom."

Another way to minimize competitive differences between political units is to increase government regulation and taxation across units--call it leveling up. This is what's happend in Europe; new members of the European Union are told that their tax rates are too low, and that they must be raised.

To go back to smoking, one technique to avoid competitive disadvantage is to avoid imposing a ban. Another, though, is to impose a ban on an ever-wider scope: get the entire county to ban smoking. The next step up, of course, is to get the entire state to ban smoking. That's what some counties in the region have called for.

The proper response, of course, is to butt out. If you don't like smoke in bars or restaurants, here's a clue: Don't go where the smokers hang out. Here's another clue: don't work there, either. Just don't bother everyone else. (permalink)

A Tax Shift or a Tax Increase?
As part of a recent budget-balancing manuever, the state of Michigan has accelerated the payment schedule for property taxes. The Mackinac Center's Jack McHugh is not impressed.

"The legal details of the new tax shift are awesomely complicated, and they are giving county officials and the real estate industry huge headaches. Still, figuring out whether this is a tax hike is not so difficult if examined solely from the point of view of how the proposal affects the net worth of an average taxpayer, who only cares about two things: How much do I owe, and when do I have to pay it?"

The conclusion: it's a tax increase. (permalink)

Health Insurance Costs Increase; Coverage Decreases.
The Kaiser Family Foundation reports that health insurance costs have risen over 11 percent this year--the fourth year of double-digit growth. For the average price paid for family coverage (almost $10,000), you could buy a cheap new or decent used car. Not surprisingly, the number of people who get insurance through work has declined by 5 million since 2001.

Now, increased spending on health care is generally a good thing. New treatments and drugs extend and improve life all the time. But what we're talking about in this survey is increased spending on employer-paid or sponsored health insurance, which is an expensive, inefficient, antiquated, and increasingly ineffective way of providing financial protection against substantial loss. (Actually, it's become an expensive pre-payment plan, but that's a post for another day.)

Labels: Health care

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More Budget Gimmickry in State Budgets.
Government officials are allowed to do things the rest of us can't. Sometimes that's a good thing (the execution of criminals, for example). Usually it isn't--especially when it comes to balancing the books.

As part of its latest balancing act, Michigan's political leaders cobbled together a bipartisan "solution" that includes forcing taxpayers to pay property taxes ahead of schedule. The Detroit News editorial board calls it a "cheap accounting trick" and "a hardship for state property owners." (permalink)

Who Controls Your Health Care: You, the Boss, or Uncle Sam?
We spend a lot of money on health care in this country. Unfortunately, it's often spent the wrong way. The people who pay for health care (taxpayers, employers) are not the ones who use it (people in public programs, employees). There's a fundamental conflict of interest, in other words. Remember the political version of the golden rule: he who has the gold makes the rules.

One exciting policy innovation that's slowly growing is the shift to consumer-controlled health care spending. Instead of your boss saying "here's you're health plan, it costs $X a month," for example, he says "Hey, here's $X, find a plan that works for you; here's a list."

This idea--"ownership"--is one of the themes that could get a lot of play in a second Bush term. Grace-Marie Turner of the Galen Institute provides a review of these ideas.

President Bush expanded his health reform agenda last week with a series of new proposals, and Health Savings Accounts take center stage.

The president touts HSAs in virtually every speech as a way to give millions of Americans a chance to participate in his vision of an "ownership society." His new proposals focus on offering new subsidies and purchasing options for small businesses and the uninsured.

HIGHLIGHTS:

Small businesses: Mr. Bush would give small businesses a boost in setting up HSAs for their employees by providing companies a rebate for deposits they make to their workers' HSAs - up to $200 for individuals and $500 for families.

Creating an HSA also would allow employers to purchase health insurance with higher deductibles that would likely be less expensive so they could stretch their health insurance budgets further.

The credit to small employers is a brilliant mix of good politics and good public policy and gets around our usual opposition to giving health subsidies to employers. This one is visible to the employee, and it is portable since the money is put into the employee's HSA. It has the added advantage of giving companies an incentive to set up HSAs for their workers.

The uninsured: The president would build on his idea of providing refundable tax credits to the uninsured by giving them the option of splitting the subsidy, using part of it to purchase a high-deductible health insurance policy and depositing part into an HSA. Uninsured families could get a $1,000 contribution to their HSA, with a $2,000 refundable credit to help purchase a high-deductible health plan. [Editor's note: a "refundable tax credit" means you get a "tax cut" even though you paid no taxes. At least it's better than making people suffer through a public program such as Medicaid.]

Cross-state purchasing: People must buy a high-deductible health insurance policy to accompany their HSA, and that is a problem in many states that have driven up costs by over-regulating and over-mandating their health insurance markets. President Bush would set up competition by allowing people to buy health insurance across state lines. If you live in New York and can't afford to buy insurance there, you could shop in Connecticut to try to get a better deal. [Editor's note: great idea!]

There also are plans that involve more government, including signing up "millions more SCHIP and Medicaid-eligible children," creating more community health centers, and giving grants to the states for state-run insurance pools "to help low-income Americans get the most out of their credits." But the vision of consumer choice, market competition, and individual ownership of health insurance clearly are bedrock principles.

Labels: Health care, Medicaid

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Have You Driven a Ford Lately?
As a child growing up in an auto-dominated state, I often heard the joke/lament "Make sure you don't buy a car that was built on a Monday or Friday." (The idea, of course, was that workers would be either too hung-over from the past weekend, or too distracted by the upcoming one.)

American automakers have achieved some impressive gains in quality since then, but there's still this little problem of productivity. Under a new contract, Chrysler workers are given a month of unpaid vacation if they have 8 unexcused absences. That's actually an improvement; the number used to be 12. In some auto plants, the rates of absenteeism run up to 20 percent. Now, that includes vacation (up to 5 weeks per employee), but, says the Detroit News, "the most crippling problem is employees who just skip work." Honda and Toyota, on the other hand, report no such problems.

The implication for public policy: incentives matter. (permalink)

Administrivia: Google Ads on the PolicyGuy Site.
Regular readers of the PolicyGuy blog will notice some Google ads on the screen. It's simply a way of trying to earn some pizza money. I should point out that I don't necessarily endorse every item linked to in the ads.

Google serves up the ads based on key words. It gives web publishers the ability to exclude specified sites from advertising on their pages. Some call this censorship, I call it exercising discretion. From time to time you may see links to sites that espouse positions I disagree with. That's fine, but I can (and have) rejected a few sites that go beyond the pale in terms of decency, civility, and the like. (permalink)

What Insurance Crisis?
That's the question asked by David Gratzer; his answer: not much. If you take away those on Medicaid (or eligible but not signed up), as well as those who could afford insurance (earning $50,000 or more annually) but choose not to buy it, the number of "uninsured" is deflated by over 80 percent, from 45 million to 8.2 million.

What to do about those people? There are many steps that could be taken, but Gratzer offers this:

"Washington should offer states block funding (using welfare reform as a model) and allow them to experiment with coverage options. Some states would spend the money on the people who need it most: the chronically uninsured. By not focusing on the higher-income uninsured, or those eligible for government insurance, a state-created voucher program could potentially offer thousands of dollars per person for coverage — enough to buy insurance in any state in the nation."

Labels: Health care, Medicaid

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PolicyGuy in the Detroit News.
The old media are starting to use new media techniques. The Detroit News, one of the two leading papers in Michigan, has started a blog for the 2004 election. While institutionally produced blogs can sound, well, institutional, the News blog encompasses a variety of voices, including professional journalists and "civilians." There is also a range of ideas represented.

The chief point of interest of all this to me is that I am one of the bloggers on the panel. It's been a good experience so far. For one thing, it reinforces the idea I have long held, which is that the shorter the piece, the more difficult it is to write it. No wonder why political (and policy) discourse alternates between the shrill and the vapid; these are easy devices to fall back on when time and space are tight. (permalink)

Is government nothing but a jobs program? A defense of offshoring.
Jobs to India! Call centers in Mexico! The political world is abuzz with concerns that all the government jobs are going overseas.

I have already addressed this concern as it relates to Michigan, but the Reason Public Policy Institute provides more details by examining the recent action by the California Senate to kill all state contracts with foreign companies.

The institute has a wealth of materials on the offshoring controversy. Ted Balaker, for example, offers this recent op-ed on the senate action. An excerpt:

"It's time for California to sober up, and remember that government exists to provide services, not jobs. Outsourcing - like technological advancement - allows governments to do things better and more efficiently .... Want to create more jobs for human scribes? Just dump every copier in every government office. Feel that? It's the unemployment rate shrinking."

The proposal, of course, is merely hypothetical; putting thousands of people to work as government scribes (or if we abolish computers, bookkeepers) will require even-higher rates of taxation--a job killing measure if there ever was one. (permalink)

Performance-Based Pay Can Help Schools
Public schools, like most of the public sector, have been slow to pay workers (top executives included) on the basis of the results they deliever. Cheri Pierson Yecke, the Distinguished Senior Fellow for Education and Social Policy at Center of the American Experiment, thinks that this should change.

Yecke, the former commissioner of education for Minnesota, points out that Thandiwe Peebles, the new superintendent of the Minneapolis schools, has a small performance-based element in her contract. I'll let her pick it up from here:

Under such an arrangement, like those of CEOs of major corporations, she is guaranteed a basic salary -- but if certain goals are met, then monetary bonuses would follow. This is happening elsewhere in urban settings, and it is working.

In 2002, Deborah Jewell-Sherman signed a performance-based contract as the new superintendent in Richmond, Va. Many colleagues advised her not to sign -- the contract was seen as an invitation to her own dismissal.

But the Richmond school board made it clear: It was time for action. Members wanted measurable results and weren't going to wait around forever to see them met.

Jewell-Sherman was required to meet three goals in her first year:

• To double the number of the district's 55 schools with 70 percent or more of their students passing the state tests. (That number went from 10 to 23.)

• No more than 12 schools would rank in the lowest achievement category. (Under Jewell-Sherman's guidance, that number fell from 23 to 9.)

• At least 70 percent of the third-graders in 16 low-performing schools would pass the state reading test. (This goal was not met.)

But for exceeding two of her three goals, the school board awarded her $24,000, a hefty addition to her $133,500 base salary.


The results of holding top leadership to account are promising: "In the past, some children were seen as beyond help, but now educators report a new attitude -- one that focuses on the intrinsic capabilities of each child rather than on obsessing about how a child's background makes that child unaccountable for his or her learning."

While being part of educating the next generation may have its own rewards, administrators (and teachers) respond to financial incentives like everyone else--if given the chance. The results, as the case of Richmond suggest, point to benefits for students, taxpayers, and school employees alike.

Labels: Education

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The PolicyGuy blog is "devoid of hyperbole." And that's a good thing.
Lots of blog publishers offer a selected list of other blogs--a blogroll, in the "trade." Yet few bloggers give you any hint of why a given blog is on the blogroll.

Give credit, then, to Mitch Berg, of Shot in the Dark, who is running a series of posts about his blogroll. Each day's entry covers a different letter of the alphabet. Here's what Mitch has to say about the PolicyGuy blog: "Devoid of hyperbole, John LaPlante's blog is an excellent read for a lot of the subjects that aren't...well, hyperbolic enough for most blogs to cover. Always a fascinating read."

Thanks for the plug to Mitch, a man of several talents: making corporate web sites less bad, blogging (of course), and I don't know what else. These days, Shot in the Dark focuses on the presidential race. Other topics of interest, though, include second amendment rights (especially Minnesota's conceal carry law), the plight of divorced fathers in the court system, and the state of talk radio. Oh yeah, did I mention that Mitch is part of a group of Minnesota bloggers who have their own radio show? New media, meet old media. (permalink)

Merit Pay Merits Attention.
"Hard working, high quality teachers will thrive under a merit-pay system, while the teachers who don’t strive for continual improvement will find other jobs. Money is not just a means of supporting families but is a measurement of who and what we are. By providing this simple method of motivating our teachers, we can move them toward their full potential — and in the process begin a whole new era of education, one in which it will once again be fun to teach."

So says Cynthia Mahar, a teacher at a magnet public school in Michigan.

Labels: Education

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A Good Resource for "Gay Marriage" Laws.
What's the legal definition of marriage, and what isn't? Stateline has a readable review of laws (current and recently proposed) and ballot proposals in each of the states. (permalink)

Arizona Lawmakers: I Can't Get Enough Time in Office
Arizona, like many states, has term limits. And as is the case with other states, politicians there are finding ways around term limits. One method: members of the House and Senate who are sympathetic to each other and whose districts overlap agree to swap seats--or at least attempt to. The senator runs for the House seat, the representative runs for the Senate seat, giving both the opportunity to trade on their name recognition without having to leave office. This also allows the officials to obey the letter, if not spirit of the term limit law. (permalink)