Public Education, Yes. Government-run schools? Not for all.
In the wake of Milton Friedman's death, I decided to look at his 1956 essay, which started him down the path of advocating for school choice.

The essay is The Role of Government in Education. There are two major components, K-12 education, followed by higher education.

For higher education, Friedman proposed a contract by which college students would get funding in exchange for a portion of their post-college income. He admits that it has a funny smell to it: "There seems no legal obstacle to private contracts of this kind, even though they are economically equivalent to the purchase of a share in an individual's earning capacity and thus to partial slavery."

On K-12 education, he says that we have three questions to ask.

Should government compel minor children to be educated? Yes, he concludes, as an educated citizenry is vital to a stable democracy.

Should the cost of that education be borne only by parents and the child, or by society at large? Friedman comes down on the side of compulsory payment of others (taxation), on the grounds that primary and secondary education carries substantial "neighborhood effects," or what your Econ 101 class may have called "externalities."

Who should administer that education? Through a series of events, we have ended up with giving a monopoly, based on geographic scope, to government bodies known as local school districts, the directors of which (school board members) are selected by political means (that is, school board elections).

Yet as Friedman points out, government financing need not mean government operation of schools, let alone government schools being the only place at which taxpayer funds would be spent. (Think of food stamps; they are not bought at "public grocery stores.")

Governments could require a minimum level of education which they could finance by giving parents vouchers redeemable for a specified maximum sum per child per year if spent on "approved" educational services. Parents would then be free to spend this sum and any additional sum on purchasing educational services from an "approved" institution of their own choice. The educational services could be rendered by private enterprises operated for profit, or by non-profit institutions of various kinds. The role of the government would be limited to assuring that the schools met certain minimum standards such as the inclusion of a minimum common content in their programs, much as it now inspects restaurants to assure that they maintain minimum sanitary standards. An excellent example of a program of this sort is the United States educational program for veterans after World War II.

Fifty years after Friedman's initial essay, school choice has but a toehold in American education. It works more or less at the university level, with privately and publicly owned colleges.

At the K-12 level, school choice is expanding, with tax credits, tax deductions, voucher programs, and other means operating in about a dozen states. Here's hoping that it doesn't take another 50 years for the idea to get to fruition.

Labels: Education, School choice

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Calling would-be policy nerds.
The Charles G. Koch Charitable Foundation runs a year-long program "to identify up and coming leaders and entrepreneurs interested in liberty." It then helps them "develop the knowledge, skills, and experience necessary for careers in market-oriented think tanks, policy institute, and other non-profit organizations."

The associates, who are paid, work in various think tanks in Washington DC, and take classes in "Market-based management." The foundation serves as a career development and networking facilitator after the 12 months are up.

Applications are due by March 1, 2007. Applicants must have 10 or fewer years of professional experience. If you know someone who might find this a good opportunity, send them this link. (permalink)

Fifty Years of School Voucher Progress.
The recent death of Milton Friedman reminds us all of the value of competition in education, and the promise--largely untried--of school vouchers.

The Milton and Rose D. Friedman Foundation offers a timeline of the idea of school vouchers in a poster they recently sent my way. Here are some of the items on the list:

1955: Friedman articulates the idea of school vouchers--government financing of education coupled with consumer choice of school, in "The Role of Government Education," a chapter of the book Economics and the Public Interest

1955: Minnesota enacts an education tax deduction.

1962: Friedman writes Capitalism and Freedom, which further discusses vouchers.

1970: The U.S. Office of Economic Opportunity decides to create a pilot voucher plan. The NEA denounces vouchers.

1972: The U.S. Office of Economic Opportunity creates a pilot program in Alum Rock, California. It is very limited in scope, hindering its demonstration value.

1975: The president AFT--the other teachers union--reverses his opinion and comes out in favor of vouchers, in "Vouchers: A Critic Changes his Mind."

1980: The PBS series "Free to Choose" highlights economics, and school choice.

1983: Reagan administration proposes vouchers and tuition tax credits. In Muller v. Allen, SCOTUS gives OK to Minnesota tax deduction.

1985: Reagan administration proposes converting Title I money to vouchers.

1987: Iowa enacts the Iowa Tuition Tax Credit

1990: Wisconsin enacts the Milwaukee Parental Choice Program

1995: Ohio creates a scholarship and tutoring program for Cleveland.

1997: Arizona creates the Arizona Tax Credit program. Minnesota establishes a tax credit program and expands the tax deduction.

1998: SCOTUS upholds the use of religious schools in the MPCP

1999: Florida starts the A+ program, which gives vouchers to students in failing public schools. Illinois creates an education tax credit.

2000: Florida expands the A+ program to include students with special needs.

2001: The Illinois Supreme Court rejects a Blaine Amendment challenge to the state's tax credit. Florida enacts a corporate tax credit program, as does Pennsylvania.

2002: In Zelman v. Simmons-Harris, SCOTUS rules that the Cleveland program does not violate the U.S. Constitution

2003: Pennsylvania creates a tax credit for pre-K.

2004: The DC Schools Choice incentive Act implements vouchers in the nation's capital city.

2005: Utah enacts a Special Needs Scholarship program. Arizona and Ohio expand school choice programs.

Labels: Education, School choice

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New Blog.
Another item on the regular blog-reading list: State of Nature. (permalink)

Legislative Scheduling of Sports Schedules: Good Stewardship, or Mere Meddling?
Glenn Price of the Durant (Oklahoma) Daily Democrat thinks that the state legislature should require that when Oklahoma State University (division I) schedule tune-up games against division II opponents, it should do so against schools within the state.

"Between both the men and women's programs, OU did not play one exhibition game against another Oklahoma state supported school this year. But, they did play against two Missouri teams and gave them money to play the exhibition games. Why not an Oklahoma team? ... When the division I schools set up these exhibition games, why don't they use the division II teams that are in their own state to help out their fellow state universities?"

Price compares the situation of OU and OSU to the two universities out east, Louisville and Kentucky: "Both schools were perennial powerhouses in basketball. They were about 100 miles apart, both were state supported schools, but they refused to play each other. The state legislature got tired of the two schools being afraid to schedule each other, so they passed legislation that the schools must play each other at least once a year in both football and basketball."

Ah, the wisdom of the legislature.

Labels: Education

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No Longer Welfare? Minnesota Governor Opens Door to Expansion of Government-Financed Health Care.
Tim Pawlenty can know which way the wind is blowing as well as any politician. But are his policy solutions any better for the trouble?

Minnesota's governor once called the state's generous public healthcare programs (which go above and beyond Medicaid) "welfare." And that wasn't meant as a compliment.

Now he's all for it, apparently, calling for "universal coverage" through using the state's (sure to be temporary) budget surplus.

Powerlineblog says "Among the cynical adages that explain a lot about democratic politics is this one: 'Vote for your enemy -- he has no one to sell out to but you.' It's an adage that seems to apply more reliably to Republicans than to Democrats. In any event, however, our own Governor Tim Pawlenty is in the process of providing a case study in the merits of the adage."

This continues his history of tacking towards government manipulation of the economy, including his "Boston Tea Party" talk about prescription drug companies (2003); encouragement of violating U.S. law on importing prescription drugs and bringing price controls to the world's last important base of pharmaceutical discovery;(2004); get state government into the business of gambling (2004); and a ridiculous-on-its-face attempt to call a tax something other than a tax (2005); favoring the taxation of working stiffs for the bread and circuses of high-priced baseball (2005); and flip-flop on light rail, an ain't-that-cool feature that does little to ease traffic congestion.

Maybe the governor meant it the first time when he said "the era of small government is over," the protestation of his campaign manager.

Now only does Pawlenty call for "universal coverage"--which invariably leads to the visible foot of government stomping on commerce, if not outright government run programs--but he continues the assault on pharmaceutical advertising. I don't like commercials more than anyone else, but advertising is part and parcel of any market. Instead, the governor says that advertising will "create consumer-driven appetites for prescription medicines that do not yield wise decisions." Further, he calls for Congress to "negotiate" drug prices--a populist theme that is another step towards price control and stagnation.

Wise in whose eyes, governor?

Pawlenty is correct in his assessment that the world of American health care policy is sick. But his solution, which includes further restricting the role that consumers play in their own health care, is by nature going to blow up. Here's the final paragraph from a Star-Tribune article on Gov. Pawlenty's rush to embrace another chapter of active government:

"He also warned that the greatest challenge of establishing universal health coverage will be managing 'a modest and affordable benefit set' in a political environment."

"Modest and affordable" government programs? In Minnesota?

You may wipe off your keyboard now.

Note: Pawlenty isn't entirely wrong--there needs to be price transparency, and medical records are archaic--but the origins of these complaints lies with problems that will be exacerbated, not fixed, with increasing the state's role in health care.

Labels: Medicaid

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Making Lemons Out of Lemonade
Is this an example of municipal "investment?"

The city of Lebanon, Ohio, spent $38 million to get into the telecom business, selling cable TV, telephone, and Internet services. It is now going to sell its system to Cincinnati Bell ... for $8.62 million. And it will still have outstanding debts of $9.8 million.

The Middletown Journal has the details; the Columbus-based Buckeye Institute says that any attempts by the city to celebrate the sale are mere spin on what has been a bad idea from the start.

"This ten-year experiment has illustrated that telecommunications in Lebanon should have been left to private companies all along. It has also shown once again that when government competes against private enterprise, taxpayers lose." (permalink)

Public Sports Subsidies: Not Just a Major League Mistake
Public subsidies of sports teams is on of the follies of our tims. While it's teams in Major League Baseball or the National Football League that get the most attention--and dollars--you don't have to be a multimillionaire in the big leagues to enjoy a boost from Joe Sixpack.

The Commonwealth Foundation has this to say about some goings-on in Pennsylvania:

For Sale: Harrisburg Senators (No, Not Those Senators)

Grant R. Gulibon
11.06.06

In Pennsylvania and across the United States, taxpayers don’t need to look very hard to find examples of wasteful, unconstitutional, or just plain wrongheaded government spending decisions. One of the most prominent such examples has been the willingness of elected officials to give in to professional sports team owners’ demands for new, taxpayer-financed stadiums and arenas.

In Pennsylvania, owners’ lobbying of state and local officials—punctuated with the veiled threat that they might move their franchises if taxpayer subsidies were not forthcoming—bought new, primarily taxpayer-funded baseball and football stadiums in both Pittsburgh and Philadelphia. One Pennsylvania community, however, wasn’t content to merely subsidize its hometown team via a new or refurbished stadium.

In 1995, the City of Harrisburg was threatened with the loss of its minor league baseball team, the AA Senators. The Senators had been purchased for $4.1 million, and the new owners intended to move the franchise to a new, taxpayer-financed facility in Springfield, Massachusetts. In response, Harrisburg Mayor Stephen Reed took the extraordinary step of having the city buy the team for $6.7 million in order to prevent the move.

At the time of Harrisburg’s entry into the baseball business, the mayor acknowledged that buying and running a professional baseball team was unusual for a city government. Indeed, most elected officials recognize that owning or operating private entertainment businesses, such as baseball teams, is not the proper role of government. Reed did it anyway.

For their part, supporters of the city’s purchase of the Senators claim that the team has had a positive effect on the Harrisburg area during the past decade. But with regard to the franchise’s economic impact, if the experiences of other communities are any guide, the reality is likely much different. Studies of professional sports teams and stadiums have consistently found that the employment and income growth attributable to such franchises and facilities has been minimal at best.

Furthermore, government ownership of the Senators has probably put many other privately owned and operated businesses in the surrounding region at a disadvantage. Fans attending a baseball game in Harrisburg are spending money that they would have otherwise spent at another entertainment establishment, such as a movie theater, bowling alley, or amusement park—venues that are rarely, if ever, taxpayer subsidized. In other words, any direct or indirect “profit” for the city from the Senators is offset by losses elsewhere.

While the city has been pleased with owning the Senators, Harrisburg’s overall fiscal condition has gradually deteriorated at the same time, reaching the point of crisis this fall. In late October, facing an estimated $14 million deficit that has already necessitated the layoffs of a number of city managers, police cadets and other employees, Mayor Reed announced that he is reluctantly putting the Senators up for sale—with the condition that the team remain in Harrisburg. Published reports indicate that at least three potential owners are interested in purchasing the team, but it has also been speculated that the mayor’s insistence that the franchise stay in Harrisburg will limit the price the city could receive for the Senators.

Ironically, while selling the Senators—along with two city-owned islands in the Susquehanna River and approximately $7 million in artifacts purchased by Mayor Reed for a planned “Wild West” museum—is fiscally prudent, doing so may not have much positive effect on Harrisburg’s current precarious financial condition. A sale of the Senators could probably not be completed before the end of 2006, and the mayor has stated that any proceeds from a sale should be first used to pay off the bonds used to buy the team. And if minor league baseball remains in Harrisburg, state and city taxpayers will almost certainly be forced to eventually shoulder the costs of upgrading the Senators’ current home field, Commerce Bank Park.

To be sure, buying the Senators was not the sole—or even the largest—reason for Harrisburg’s current fiscal calamity. Nevertheless, city government’s willingness to expand its scope beyond its core responsibilities of safeguarding citizens’ lives, liberty, and property is a disturbing pattern that contributed to the dire circumstances its leaders must now confront. If a minor league baseball franchise is to remain in Harrisburg, it should do so because it can compete as a privately owned entity—as virtually all of its counterparts across the United States must do—rather than as a government-owned enterprise. (permalink)