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Posts Tagged ‘Government Inefficiency’

The current crisis teaches us that excessive regulation and bureaucratic sloth can have deadly consequences.

Here’s John Stossel’s video with another lesson, explaining that we need more capitalism rather than more government.

This seems like a no-brainer, especially given the wretched economic performance of countries where the government owns or controls the means of production.

But not everyone agrees. The appropriately named Paris Marx wants government to have more power, making the case for nationalization of Amazon in an article for Jacobin.

The government needs to…respond to the needs of people across the country as the pandemic situation deteriorates. The response should be to nationalize Amazon and integrate it with the USPS. …Nationalizing the company would also allow Amazon workers to get covered by the same union as postal workers… Amazon isn’t just an online e-commerce marketplace. …Amazon Web Services (AWS) is a cloud computing platform…the cloud should be placed under public ownership. Taking control of AWS would allow the government to…ensure the cloud platform is serving the public good… We have a rare opportunity to fundamentally alter the economy to serve the needs of people instead of private profit, and it’s time to seize it.

Call me crazy, but if the government takes over Amazon and merges it with the Postal Service, I’m guessing that what emerges will have the inefficiency of the latter rather than the nimbleness of the former.

Just imagine a giant Department of Motor Vehicles (or, on a related note, the government’s track record on teaching kids to drive).

Which is why the U.K.-based Economist warned back in 2017 about the dangers of government-run companies.

Expanded state ownership is a poor way to cure economic ailments. For much of the 20th century, economists were open to a bit of dirigisme. …But in the 1970s economists came to see state ownership as a costly fix to such problems. Owners of private firms benefit directly when innovation reduces costs and boosts profits; bureaucrats usually lack such a clear financial incentive to improve performance. Firms with the backing of the state are less vulnerable to competition; as they lumber on they hoard resources that could be better used elsewhere. …economists saw in the productivity slowdown of the 1970s evidence that an overreaching state was throttling economic dynamism. …State-owned firms pose risks beyond that to dynamism. Government-run companies may prioritise swollen payrolls over customer satisfaction. More worryingly, state firms can become vehicles for corruption, used to dole out the largesse of the state to favoured backers or to funnel social wealth into the pockets of the powerful. As state control over the economy grows, political connections become a surer route to business success than entrepreneurialism.

The good news is that very few politicians are supporting explicit nationalization.

The bad news is that there’s plenty of support for intermediate steps involving cronyism, industrial policy, and various types of direct and indirect subsidies.

Including in the legislation recently approved in Washington (not that anyone should be surprised).

Professor Amit Seru from Stanford and Professor Luigi Zingales from the University of Chicago warn, in a column for the Wall Street Journal, that the U.S. has take a dangerous step on the road to central planning.

The need to help individuals and small firms has provided cover to the largest corporate subsidy program in U.S. history. Under intense pressure from lobbyists, the Cares Act allocates $510 billion to support loans for large businesses. A small chunk of this money ($56 billion) will be used directly by the Treasury to grant loans to airlines and other “strategic” firms (read: Boeing). The Treasury will then confer the rest ($454 billion) to the Federal Reserve to absorb losses the Fed might incur in lending to firms in the private sector. The expectation is that the central bank will leverage this money… This is the largest step toward a centrally planned economy the U.S. has ever taken. And it socializes only losses. Profits, when they come, remain private. …The urgency of the moment facilitated a giveaway to vested interests. Now that the Cares Act is law, policy makers need to find ways to impose restrictions on how the money is deployed. It isn’t only a question of fiscal prudence; the nature of American capitalism is at stake.

In other words, the U.S. is moving in the wrong direction on my “Industrial Policy Spectrum.”

The key unanswered question is whether the government’s new powers will be temporary or permanent.

There’s a legitimate argument for some form of intervention while the crisis in ongoing. But what happens once things go back to normal? Will politicians allow the “creative destruction” of capitalism, or will they use their expanded power to permanently interfere with market forces?

If they choose the latter, there will be less long-run prosperity.

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About three weeks ago, when the coronavirus crisis was becoming a big deal, I explained the libertarian viewpoint.

  1. Governments should focus on protecting life, liberty, and property. That includes fighting pandemics.
  2. A big sprawling federal government will be less capable and competent when responding to a real crisis.
  3. International evidence suggests greater government control of the health sector is not a good recipe for success.
  4. Domestic evidence indicates that bureaucracies such as the FDA and CDC are exacerbating the problem.

Unsurprisingly, there are still plenty of people claiming the crisis shows why libertarianism is impractical and misguided.

Henry Olsen opines for the Washington Post that the time has come to put libertarianism on the ash heap of history. But much of what he writes cries out for correction.

It is difficult to underestimate the influence of libertarian principles on Republican economic policy. Nearly every economist or economic journalist revered by the party advocates for policies that are derived from libertarian impulses. …Let people do what they want, the story goes, and they will cure poverty, bring world peace and do better at managing social discord than any centrally planned government act can ever hope to accomplish. …Pure libertarianism…is, of course, almost nonexistent in party circles… Even libertarian icons such as Sen. Rand Paul (R-Ky.) or Rep. Justin Amash (I-Mich.) publicly support much higher levels of government activity than do many of the thinkers and activists who sing their praises.

There are two huge problems with the above passages.

First, it’s nonsensical to claim that libertarians have a big influence on GOP economic policy. Just look at the mixed-to-horrible track records of Nixon, Bush I, Bush II, and Trump.

Ironically, Henry actually contradicts his own assertion by noting that libertarianism is “almost nonexistent in party circles.”

Second, what he’s really criticizing is the notion of limited government. Yes, libertarians believe in small government, but so do many conventional conservatives (remember Ronald Reagan?).

So is the notion of small government wrong? Henry argues that people want “strong government.”

Trump…grasps what they do not: People love freedom, but they love security as much or more. Time and again, people draw together in support of strong government to protect them from something fearful they cannot handle on their own. War and civil unrest are classic events that persuade people that strong mandatory measures are necessary; the current pandemic is another. …The modern social welfare state is grounded in the idea that some measure of economic security, opportunity and equality are necessary parts of a decent life. Policies designed to achieve these goals all impose on individual liberty through taxes and regulation. …a supermajority of Americans approves… They do not believe that liberty is the one true god before which all should bow. …The pandemic’s aftermath will see….conservatives…try to right this imbalance in the name of national security and general welfare, even if it means curtailing the liberty to trade. As the pandemic continues, it will be much easier for Republican voters and politicians to cast off the rose-colored libertarian glasses they have worn for far too long.

Let’s explore whether the notion of small government is inconsistent with the idea of strong government.

Writing for The Week, Bonnie Kristian explains how libertarian principles apply. Yes, government action is appropriate, but in ways that are consistent with other principles.

…pandemic-era libertarianism is emerging, and it remains distinctly libertarian. Here are the trends… Praise for the free market’s role in keeping day-to-day life functional. “That gallon jug of hand sanitizer delivered to your front door less than 48 hours after you ordered it online? It didn’t show up because Trump tweeted it into existence or because the surgeon general is driving a delivery truck around the country,” Reason‘s Eric Boehm wrote… Condemnation of counterproductive regulations and lack of transparency. Why is the United States so far behind other countries in testing for coronavirus cases? For weeks, the FDA and CDC wouldn’t let medical workers and academics move forward with COVID-19 tests they’d developed without lengthy processes of federal approval. …Rejection of corporate bailouts and price controls. Trump is exploring plans for corporate bailout loans and other economic stimuli which libertarians generally oppose. …Insistence on temporary changes. Fierce opposition to expansions of the surveillance state to fight the novel coronavirus is likely widespread among libertarians in no small part because privacy rights, once lost, are very rarely recovered. But the risk of this pandemic permanently expanding the power of the state will shape the libertarian view on every proposed solution.

These are solid principles. And very desirable.

Now let’s specifically address whether we need a “strong government.”

In a column for the National Interest, Andy Craig addresses that issue, most notably with his observation that responding to a pandemic is a legitimate exercise of government power, but also that government incompetence has worsened the crisis.

…there has been snark from some quarters about the current crisis somehow catching libertarians flat‐​footed. …Libertarianism, properly understood, encompasses certain core functions as the proper role of government. It is not the libertarian view that government should be ineffective at protecting individual rights or dysfunctionally paralyzed in the face of a massive threat to people’s lives. Government has a role to play in responding to the pandemic in much the same way it is the government’s job to prosecute murderers or defend the country from invasion. …Libertarian criticisms of bad regulations have proven especially prescient. A crucial government failure has been…inflexible and heavy‐​handed bureaucracy, which has held up tests and prevented thousands of private and academic labs from quickly increasing testing capacity. …Another example of a libertarian response to the pandemic has been the quick need to suspend many occupational licensing restrictions, such as by letting doctors practice interstate and upgrading the permissions of nurse practitioners and doctors’ assistants. Even mundane and trivial regulations…have suddenly been cast aside. Two months ago, who would have thought it an urgent concern to suspend alcohol regulations so that restaurants can serve beverages to go for home delivery by rideshare drivers?

Amen.

I’ve documented (in Part I, Part II, and Part III) how big, blundering, bureaucratic government has hindered an effective response to the crisis.

Sadly, it’s quite likely that politicians will use the crisis to expand government power.

That’s certainly consistent with what we’ve seen through history. Professor Don Boudreaux of George Mason University has a new column about the insights of Robert Higgs.

…a book that I’ve lately been pondering quite a lot: economic historian Robert Higgs’s 1987 volume, Crisis and LeviathanIn this richly documented work, Higgs convincingly shows that with each national crisis government power ratchets up. The crisis might be fully genuine or inflated or utterly mythical; it matters not. Whenever there prevails widespread belief that a crisis looms, people turn to the state for help. …additional powers granted to – or seized by – government during each crisis shrinks somewhat when the crisis passes. …But never do such additions to state power fully disappear. …the likelihood is that the ideology of the holders of power prompts them, not to keep their power in check, but to expand it. And as power expands in a ratcheting-upward way, power becomes ever-more valuable and intoxicating to possess.

In a column for the U.K.-based CapX, Helen Dale discusses the role of a limited but competent state sector as a key to classical liberalism.

…liberalism needs a strong state. Yes, state. Not strong supranational organisations like the EU or UN or IMF. …Liberalism needs a state powerful enough to collect taxes and pay for police forces, courts, prisons, and the military. Only powerful states, it emerges, can strong-arm their citizens into the rule of law: that is, a system where like cases are treated alike, contracts are enforced…the modern nation-state is the only way to produce liberal tolerance at scale. …If liberalism needs a strong state, that state must also be a constrained one for liberal forms of governance to persist. Johnson and Koyama speak of a “shackled leviathan” rather than a “despotic leviathan”; that is, powerful states require institutional constraints because without them you get modern China or, historically, Nazi Germany and the USSR.

She’s highlighted a key issue, which is how you give government power to do good things without simultaneously giving it power to do bad things (hint: a good answer is the U.S. Constitution’s limits on the scope of government, at least back in the days when the Supreme Court cared about Article 1, Section 8).

Professor Michael Munger of Duke University makes the all-important point that a bloated public sector will be less competent at doing the few things we want from government.

I see the proper domain of the state as sharply circumscribed… Given that we have a state, it must have the capacity to carry out the functions… A key part of the justification for the existence of the state is the duty to manage property rights and institutions…the state needs to have sufficient capacity to protect individual rights… the key variable is the scope of government, not its size. A relatively small government that arbitrarily sets prices, nationalizes private property, and controls the media is the archetype of the authoritarian regime, as is the case in Turkmenistan or Chad. A large government that accepts constitutional and customary limits on its domain of action can be an archetype of personal freedom, as is the case in Denmark and Sweden. …The state needs the capacity to carry out public health functions, but those powers must be effectively limited to that domain, not available to be hijacked for socialist boondoggles. To my friends on the left: If you had been responsible enough to keep government in its proper, limited role we would have plenty of resources and capacity to carry out the functions we now find lacking. …We need a state that is good at a few things, not your state which tries to do everything and fails at all of it.

There’s lots of good stuff in the above excerpt, including the fact that fiscal policy is only a small piece of the puzzle when measuring the extent of free enterprise (which is why there’s far more economic liberty in, say, Denmark compared to every single country in the developing world).

The last sentence from the excerpt tells us everything we need to know. Indeed, a version of this insight is my Seventh Theorem of Government.

The bottom line is that we definitely don’t want big government.

What’s needed is not really “strong government,” but rather limited, competent, and effective government. Think Singapore, which does a much better job of providing core public goods while spending much less money.

As I noted when correcting Henry Olsen, this is not a libertarian-only principle. It also works for small-government conservatives, an important distinction since Singapore isn’t libertarian (high scores for economic freedom are offset by weak scores for personal freedom).

And I’ll close by observing that there’s plenty of academic and empirical literature supporting this Theorem.

Robert Samuelson and Mark Steyn have made the same point.

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I wrote about “Coronavirus and Big Government” on March 22 and then followed up on March 27 with “Coronavirus and Big Government, Part II.”

Now it’s time for the third installment, and we’ll start with this hard-hitting video from Reason, which shows how red tape has hindered the development and deployment of testing in the United States.

Next, here are a bunch of stories and tweets about the deadly impact of bureaucracy and regulation.

As with the Part I and Part II, feel free to click on any of the stories for the details.

By the way, the problem of excessive government exists in other nations.

Here are two tweets about the situation in the United Kingdom.

The first one deals with having to get government approval for medical devices.

The second one deals with how politicians and bureaucrats have misallocated public health resources – similarly to some of the foolish misadventures of the FDA and CDC (and let’s not forget the World Health Organization).

I’ll close with another story from the United States.

This report from Reason is especially useful because it contains a 30-minute interview with Professor Alex Tabarrok of George Mason University. So if you liked the short video at the start of this column, you’ll definitely want to click through and watch this video.

The message here isn’t that government shouldn’t exist. As I wrote earlier this month, collective action is appropriate to protect life, liberty, and property. Needless to say, that libertarian principle applies during a pandemic.

But that doesn’t mean government should be micro-managing everything.

In normal times, excessive regulation is a costly nuisance because things cost more and take longer.

In a crisis, however, that means needless death and suffering. Which is exactly what’s happening today.

Let’s hope the folks in Washington learn from this awful experience.

P.S. Another lesson to be learned is the Seventh Theorem of Government.

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I wrote yesterday how cumbersome bureaucracies and foolish regulations have hindered an effective response to the coronavirus.

This isn’t because governments are run by bad people. Some of them probably are that way, of course, but the real problem is that politicians and bureaucrats are dealing with a perverse incentive system.

They’re largely motivated by power, money, publicity, staffing, and votes.

And that leads to some very unfortunate outcomes, as Betsy McCaughey explained in her syndicated column.

Landing in the hospital on a ventilator is bad. But worse is being told you can’t have one. …learning that the state’s stockpile of medical equipment had 16,000 fewer ventilators than New Yorkers would need in a severe pandemic, Gov. Andrew Cuomo came to a fork in the road in 2015. He could have chosen to buy more ventilators. Instead, he asked his health commissioner, Howard Zucker to assemble a task force and draft rules for rationing the ventilators they already had. …Cuomo could have purchased the additional 16,000 needed ventilators for $36,000 apiece or a total of $576 million in 2015. It’s a lot of money but less than the $750 million he threw away on a boondoggle “Buffalo Billion” solar panel factory.

For what it’s worth, I’m not blaming Governor Cuomo for a failure to buy more ventilators.

In the same situation, I also may have decided that it wasn’t wise to spend $576 million for an event that most people thought was very unlikely.

But I am blaming him for supporting ever-bigger government in New York and getting ever-more involved in things that aren’t legitimate functions of a state government.

That applies to the solar factory mentioned in the article, and it also applies to other vote-buying schemes such as mass transit boondoggles, expanded rent control, and anti-gun snitch lines.

And when he expands the size and scope of state government, he increases the likelihood that there won’t be the energy, expertise, or resources to address problems where government should play a role.

Such as dealing with a pandemic.

Which motivates me to unveil a Seventh Theorem of Government.

In addition to the example of Cuomo and ventilators, there’s also a story from Belgium that underscores how bloated governments are less capable.

But I’ll close by noting the Seventh Theorem is not driven by anecdotes. There’s plenty of academic evidence showing that smaller governments are more competent.

P.S. As suggested by proponents of “state capacity libertarianism,” there is a possible exception to the Seventh Theorem.

Some of the world’s poorest nations have small public sectors – at least according to official measurements. It’s certainly possible, at least in theory, that such countries would benefit if they had larger governments that were capable of providing core public goods.

Indeed, international bureaucracies commonly argue that these countries should increase their tax burdens to provide “financing for development.”

However, the real problem in such nations is rampant corruption, low societal capital, and inadequate rule of law. Which is why it’s not a good idea to generate more money for politicians in those countries.

P.P.S. Here are my other theorems of government.

  • The “First Theorem” explains how Washington really operates.
  • The “Second Theorem” explains why it is so important to block the creation of new programs.
  • The “Third Theorem” explains why centralized programs inevitably waste money.
  • The “Fourth Theorem” explains that good policy can be good politics.
  • The “Fifth Theorem” explains how good ideas on paper become bad ideas in reality.
  • The “Sixth Theorem” explains an under-appreciated benefit of a flat tax.

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Technically, my coverage of U.K election week began last Monday with a look at Jeremy Corbyn’s radical statism, and ended yesterday with some analysis of Boris Johnson’s victory.

But since I’m still in England, this is an opportune time for a new edition of Great Moments in British Government.

For those who aren’t regular readers, I should add that “Great Moments” is a sarcastic term for odd stories that illustrate the incompetence and venality of government (state, local, foreign, etc).

We’ll start with a story that shows how insiders use government as a racket to enrich their lifestyles.

Local councils are spending millions on luxury cars for mayors and officials in “ceremonial” roles, an investigation has found. Over the past three years, 207 local authorities have spent more than £4.5million on vehicles including Bentleys, Jaguars and S-class Mercedes, information disclosed under the Freedom of Information Act reveals. The cars were used by mayors, lord mayors or chairmen. The TaxPayers’ Alliance, a campaign group which carried out the investigation, said the money went on officials who “often fulfil ceremonial duties within their local authority and serve as the ‘first citizen’.

Sounds like Washington’s gilded class!

For our next example, bureaucrats in the United Kingdom don’t do a very good job of teaching traditional subjects such as math and reading, so they’ve decided to try sharing their knowledge on a rather unconventional topic.

Children as young as six are being taught about touching or ‘stimulating’ their own genitals as part of classes that will become compulsory in hundreds of primary schools. Some parents believe the lessons – part of a controversial new sex and relationships teaching programme called All About Me – are ‘sexualising’ their young children. …Documents obtained by The Mail on Sunday detail how All About Me classes involve pupils aged between six and ten being told by teachers that there are ‘rules about touching yourself’. An explanation of ‘rules about self-stimulation’ appears in the scheme’s Year Two lesson plan for six and seven-year-olds. Under a section called Touching Myself, teachers are advised to tell children that ‘lots of people like to tickle or stroke themselves as it might feel nice’. …In one, pupils are told that when a girl called Autumn ‘has a bath and is alone she likes to touch herself between her legs. It feels nice’.

For what it’s worth, I wouldn’t have wanted my kids being exposed to this kind of topic, but I must admit that bureaucrats probably have some expertise on the matter.

Next, we have a story about a woman getting fined for feeding birds.

Neighbours complained about birds flocking to Maureen Francis’ garden after she began feeding them with bird seed and other food… Wiltshire Council gave Francis the protection notice after receiving complaints and told her she could only put out one ‘small caged bird feeder’. But she refused to comply with their demands, leading to the council taking her to court ‘for the sake of the neighbours’. When Francis failed to attend the hearing last week, magistrates convicted her of failing to comply with a protection notice in her absence. She was fined £250 for over feeding the animals and ordered to pay almost £1,600 in costs. Councillor Jerry Wickham, Wiltshire Council’s cabinet member for public protection, said: “Our officers made numerous attempts to engage with Mrs Francis to try and resolve this problem. “We were reluctant to take legal action but for the sake of the neighbours, prosecution was the only option.”

Gives over-criminalization a whole new meaning.

Last but not least, British officials decided it’s okay if a two-second journey is replaced by a one-hour trip.

Motorists in southwest England will need to pay special attention when driving through Dorset County next week, where officials are putting a 41-mile detour around a 65-foot stretch of construction work. …The small section of road A352 in Godmanstone, Dorset, will be closed Monday through Friday while construction crews work on a new sewage system… The detour is estimated to take an hour to complete. The closed portion of the road would take just over two seconds to travel at the 30 mph speed limit. …The council acknowledged that most residents will ignore the lengthy detour and use smaller roads to get around the construction work. Anyone caught using the closed stretch of road will be fined $1,291.

A few years ago, a clever entrepreneur in the United Kingdom dealt with a similar detour by building a private toll road.

I don’t know if such an option exists in this case, but I can state with considerable confidence that this impossibly inconvenient detour wouldn’t be an option if a private road company was making a sewage repair.

Why? Because private companies cater to customers.

Which is a good excuse to re-share this classic scene from Ghostbusters.

Amen.

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According to the union bosses at the National Education Association, November 18-22 is National Education Week and a “wonderful opportunity to celebrate public education.”

I care about facts and I care about kids, and all the evidence shows that government schools do a terrible job. So, instead of celebrating, I’m going to focus this week on government’s destructive impact.

Let’s start with this stunning visual from Mark Perry at the American Enterprise Institute. As you can see, the main takeaways are that costs have soared and bureaucracy has expanded.

And if you look at this chart, you’ll see that test scores have been flat.

Indeed, the unambiguous conclusion is that taxpayers are being asked to cough up ever-growing amounts of cash. Yet we never see any improvements in the quality of government schooling.

Indeed, an article in National Review explains that all this money and this bureaucracy has produced a negative rate of return

A Nation at Risk…revealed, in the words of Ronald Reagan, an education system plagued by “low standards, lack of purpose, ineffective use of resources, and a failure to challenge students to push performance to the boundaries of individual ability.” …Since then the nation has devoted a great deal of attention to getting education right. To little avail. …The results of the 2017 National Assessment of Educational Progress (NAEP)…, released this month, are dismal. Fewer than half of students are rated “proficient” in each of these subjects.

But it’s not just folks on the right who think the current system is a failure.

An article in left-of-center Vox is even more dour about the effectiveness of government schools.

…cast a cold look at the performance of schools… Consider the trends: Since 2005, SAT reading scores have dropped by 14 points. A writing component was added to the SAT in 2006, and scores have dropped every year since then except for two years when they were flat. Math scores for 2015 were the lowest in 20 years. …On the ACT’s measure of “college readiness” in math, English, reading, and science, slightly more than one-third of test takers met the benchmarks in three subjects, while another one-third did not meet any(!) of the benchmarks. …According to the National Assessment of Educational Progress exams (the “Nation’s Report Card,” administered by the Education Department’s National Center for Educational Statistics), only one-quarter of 12th-graders are proficient in civics, one-fifth in geography, just over one-third (37 percent) in reading, one-fifth (22 percent) in science, and one-eighth (12 percent) in US history. Only one-quarter of them reach proficiency in math. …At the same time, we have another discrepancy, outcomes versus public school funding. …Adjusted for inflation, the national average for per-pupil spending rose steadily…the cost-benefit numbers continue to look bleak.

The fundamental problem is that teacher unions are in bed with politicians.

This doesn’t just mean that government schools are needlessly expensive (and they are). It also means that the government monopoly primarily exists as a tool to serve bureaucracy rather than students.

Consider these scholarly findings.

Does collective bargaining by teachers help or hurt students?Two Cornell academics— Michael Lovenheim, an associate professor of policy analysis and management, and Alexander Willén, a doctoral student—have recently completed a study that tries to answer it. In “A Bad Bargain: How teacher collective bargaining affects students’ employment and earnings later in life,” the professors conclude: “We find strong evidence that teacher collective bargaining has a negative effect on students’ earnings as adults.” …Students who spent all 12 years of their elementary and secondary education in schools with mandatory collective bargain earned $795 less per year as adults than their peers who weren’t in such schools. They also worked on average a half hour less per week, were 0.9% less likely to be employed, and were in occupations requiring lower skills. The authors found that these add up to a large overall loss of $196 billion per year…collective bargaining may be profitable for the teachers and staff of public schools, but the price is being paid by the students.

Washington-driven policies certainly haven’t helped. Bush’s so-called No Child Left Behind scheme failed, and the same is true for Obama’s Common Core.

Indeed, this article from the Federalist documents the failure of Obama’s approach.

…the Obama administration lured states into adopting Common Core sight unseen, with promises it would improve student achievement. Like President Obama’s other big promises — “If you like your doctor, you can keep your doctor” — this one’s been proven a scam. …Race to the Top was a $4 billion money pot inside the 2009 stimulus that helped bribe states into Common Core. …Are American children increasingly prepared…? We’re actually seeing the opposite. They’re increasingly less prepared. And there’s mounting evidence that Common Core deserves some of the blame. …ACT scores released earlier this month show that students’ math achievement is at a 20-year low. The latest English ACT scores are slightly down since 2007, and students’ readiness for college-level English was at its lowest level since ACT’s creators began measuring that item…the latest round of international tests…showed U.S. fourth graders declining on reading achievement. …Common Core sucked all the energy, money, and motivation right out of desperately needed potential reforms to U.S. public schools for a decade, and for nothing. It’s more money right down our nation’s gigantic debt hole, another generation lost to sickening ignorance, another set of corrupt bureaucrats‘ careers and bank accounts built out of the wreckage of American minds.

We can also see the dismal impact of bigger budgets by looking at experiences in various cities.

Throwing more money at the government monopoly didn’t work in New York City.

Mayor Bill de Blasio is canceling one of his signature education initiatives, acknowledging that despite spending $773 million he was unable to turn around many long-struggling public schools in three years after decades of previous interventions had also failed. …the program has been plagued by bureaucratic confusion and uneven academic results… The question of how to fix broken schools is a great unknown in education…no large school system has cracked the code, despite decades of often costly attempts. …the program was based on the union-friendly theory that struggling schools need more resources.

(For some very grim first-hand accounts of New York City’s government schools, click here, here, and here.)

It didn’t work in Newark.

Booker pitched Facebook founder Mark Zuckerberg that, with $100 million, they “could flip a whole city!” In September 2010, the troika appeared on Oprah Winfrey’s television show to present and accept the gift. For education reformers convinced that poverty could be solved given the will and the money, it was a dream come true. …the reformers’ dreams turned into a political nightmare. …Hopes for a game-changing teacher contract were quickly dashed, as reformers learned that teacher tenure protections were enshrined in state law. …Newark public schools spend $19,650 per pupil, but only $9,604 reaches the classroom.

And it didn’t work in Denver.

Denver’s once-celebrated ProComp pay system…was jointly developed by the DCTA and Denver Public Schools in 2005. …Back then, ProComp was heralded as a pioneering step forward on pay-for-performance/merit pay… The only problem? This narrative is bunk. For all the talk about “merit” and “performance,” ProComp is almost wholly devoid of any links between pay and teacher performance. …ProComp is mostly designed to reward the usual credentialism… Denver’s situation is so noteworthy because Denver is no laggard. Indeed, for many years, it has been celebrated as a “model” district by reformers. So it’s disheartening how little progress the city has actually made.

And you won’t be surprised to learn it didn’t work in D.C.

The much-celebrated success of education reform in the nation’s capital turns out to have been a lie. …Education reformers used to celebrate D.C.’s dramatic decline in school suspensions. Then a Washington Post investigation revealed that it was fake; administrators had merely taken suspensions off the books. The same reformers used to celebrate D.C.’s sharp increase in high-school graduations. Then an NPR investigation revealed that it, too, was fake; almost half of students who missed more than half the year graduated. …consider Abdullah Zaki, who back in 2013 was named DCPS principal of the year. He was just placed on administrative leave (not fired, mind you) after an audit revealed that 4,000 changes were made to 118 students’ attendance records at his high school. …consider Yetunde Reeves…who took Ballou High School from 57 percent graduation to 100 percent college acceptance in just one year. She was placed on administrative leave (again, not fired) after NPR reported teacher allegations that she leveraged the teacher-evaluation system to coerce teachers to go along with her scheme.

I realize I’m being repetitive, but more money for the government monopoly also didn’t work in Providence.

Rhode Island’s politicians this summer made a show of decrying the shameful condition of Providence public schools…peeling lead paint, vermin, brown water, leaking sewage—from a Johns Hopkins Institute for Education Policy 93-page report on Providence schools… Student test scores are the worst in Rhode Island and lower than districts in other states with similar demographics. …“the district’s performance is continuing to decline despite increased interventions and funding.” Providence’s school budget has increased by nearly a quarter since 2011.

You can also click here to read about failure in Patterson, N.J., and Los Angeles, CA. The bottom line is that more spending does not lead to better student performance.

It’s also nauseating that government schools try to brainwash kids with leftist pabulum.

Consider what’s happening in California.

California’s Education Department has issued an “Ethnic Studies Model Curriculum”…written by an advisory board of teachers, academics and bureaucrats. It’s as bad as you imagine. …The document is filled with fashionable academic jargon like “positionalities,” “hybridities,” “nepantlas” and “misogynoir.” It includes faddish social-science lingo like “cis-heteropatriarchy”… It is difficult to comprehend the depth and breadth of the ideological bias and misrepresentations without reading the whole curriculum—something few will want to do. Begin with economics. Capitalism is described as a “form of power and oppression,” alongside “patriarchy,” “racism,” “white supremacy” and “ableism.” …Housing policy gets the treatment. The curriculum describes subprime loans as an attack on home buyers with low incomes rather than a misguided attempt by the government to help such home buyers. …This curriculum explicitly aims at encouraging students to become “agents of change, social justice organizers and advocates.”

Seattle is also looking to get in the business of dishing out propaganda.

Seattle’s public-school district has proposed a new math curriculum that would teach its students all about how math has been “appropriated” — and how it “continues to be used to oppress and marginalize people and communities.” …the social-justice approach to teaching math has officially entered the mainstream (and taxpayer-funded!) arena. …this approach to teaching math will only end up harming the very groups it claims it champions. …The minority students, the members of the very groups that this curriculum presumably aims to aid, are actually going to be learning less math than they would have without it — because they will be spending some of that class time learning about how math’s racism has hurt them.

Wow. No wonder young people are sympathetic to socialism. They’re being spoon-fed crazy ideas.

To round out our discussion, here’s a video from Reason.

So what’s the solution?

Writing for Real Clear Politics, Heather Wilhelm says we need to give up on the government monopoly.

…there might not be much left to do but vote with your feet. The term “Go Galt,” which comes from Ayn Rand’s “Atlas Shrugged,” refers to citizens retreating from a political system that basically takes their money and otherwise does them no good. …odds are the public school system isn’t doing you any favors. If you’re a poor kid in the inner city, the damage and injustice is obvious… “If you send your kid to a private school,” Slate’s Allison Benedikt wrote in a 2013 essay-gone-viral, you are “a bad person … ruining one of our nation’s most essential institutions.” News flash: The public school system is already a mess, it’s getting messier, and it can only improve the old-fashioned way — through competition.

If you prefer, this quote from Thomas Sowell is spot on.

The bottom line is that government has created a bad system. It doesn’t matter that most teachers have noble intentions. It doesn’t matter that most kids are capable of higher achievement. Monopolies simply don’t perform, especially when mixed with special-interest politics.

It goes without saying that shutting down the Department of Education would be a positive step. But that’s only a partial solution. We’ll explore the real answer tomorrow.

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I’ve periodically opined about why politicians should not try to control people’s behavior with discriminatory taxes, such as the ones being imposed on soda.

And I’ve cited some examples of how these taxes backfire.

If the following headlines are any indication, we can add Philadelphia to that list.

For instances, this story from the Philadelphia Inquirer.

Or this story from the local CBS affiliate.

These examples reinforce my view that it is not a good idea to let meddling politicians impose more taxes in an effort to control people’s behavior.

Some of my left-leaning friends periodically remind me, however, that there’s a difference between anecdotes and evidence. There’s a lot of truth to that cautionary observation.

To be sure, I could simply respond by saying a pattern is evident when a couple of anecdotes turns into dozens of anecdotes. And when dozens become hundreds, surely it’s possible to say the pattern shows causality.

That being said, it is good to have rigorous, statistics-based analysis if we really want to convince skeptics.

So let’s look at the results of some new academic research from scholars at Stanford, Northwestern, and the University of Minnesota. We’ll start with the abstract, which nicely summarizes their findings about the impact of Philadelphia’s big soda tax.

We analyze the impact of a tax on sweetened beverages, often referred to as a “soda tax,” using a unique data-set of prices, quantities sold and nutritional information across several thousand taxed and untaxed beverages for a large set of stores in Philadelphia and its surrounding area. We find that the tax is passed through at a rate of 75-115%, leading to a 30-40% price increase. Demand in the taxed area decreases dramatically by 42% in response to the tax. There is no significant substitution to untaxed beverages (water and natural juices), but cross-shopping at stores outside of Philadelphia completely o↵sets the reduction in sales within the taxed area. As a consequence, we find no significant reduction in calorie and sugar intake.

Here are some of their conclusions.

We draw several lessons about the effectiveness of local sweetened-beverage taxes from these analyses. First, the tax was ineffective at reducing consumption of unhealthy products. Second, in terms of revenue generation, the tax was only partly effective due to consumers substituting to stores outside of Philadelphia. Third, low income households are less likely to engage in cross-shopping, and instead are more likely to continue to purchase taxed products at a higher price at stores in Philadelphia. The lower propensity for low income households to avoid the tax through cross-shopping leads to a relatively larger tax burden for those households. In summary, the tax does not lead to a shift in consumption towards healthier products, it affects low income households more severely, and it is limited in its ability to raise revenue.

If you’re wondering why consumers responded so strongly, here’s a chart from the study showing the price difference after the tax was imposed.

The bottom numbers in Figure 3 show that some sales still occurred in the city, but a persistent gap between city sales and suburban sales appeared.

And here’s what happened to sales inside the city (taxed) and outside the city (untaxed).

Wow. This data makes me wonder if suburban sellers will start contributing to the Philadelphia politicians who have generated this windfall?

Others have noticed how the tax is hurting rather than helping.

The Wall Street Journal opined about the failure of Philly’s soda tax.

When Philadelphia became the first major U.S. city to pass a soda tax in 2016, Mayor Jim Kenney said it would improve public health while funding universal pre-K. Two years in, the policy hasn’t delivered on that elite ideological goal. But the tax has come at the expense of working people… On Jan. 2, Brown’s Super Stores announced the closure of a ShopRite on Haverford Avenue. The supermarket is close to the city limit, and customers discovered they could avoid the soda tax by shopping outside Philly. …the once-profitable store began losing about $1 million a year. …That means fewer opportunities for workers with a criminal record. Mr. Brown’s supermarkets employ more than 600 of them, with the majority in Philadelphia. Some of the ex-cons have become his most-valued employees.

And Kyle Smith explained in National Review how the tax backfired.

Philadelphia’s outlandish soda tax is what Democratic-party politics looks like when it lets its freak flag fly. So many classic elements are there: (failed) social engineering and “think of the children!” on one side, paid for with a punitive tax on poor people and destroyed businesses, which means destroyed jobs, which in turn means lives upended. …Now that beer is, in some cases, cheaper than soda in Philadelphia, alcohol sales are up sharply. …the total loss attributable to the tax in sales of all items was $300,000 a month per store. Other, untaxed drinks also suffered sales declines within the city, suggesting people were simply saving up their shopping trips for when they left town.

I don’t feel compelled to add much to what’s been cited.

Though I will cite a headline from the Seattle Times to reinforce one of the points in the academic study about consumers bearing the cost of the tax rather than the soda companies.

And my one modest contribution to all this analysis is this comparison of the winners and loser from Philadelphia’s new tax.

For what it’s worth, similar comparisons could be developed for just about every action by every government. Academics call this “public choice” while ordinary people realize it’s just common sense.

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