More Money for Schools has not Increased Test scores
The political culture of Kansas was stirred over the last decade over a controversial proposition relating to education. And no, I'm not talking about the debate over what happens in biology class.

School districts there--no different from school districts elsewhere--complained that they weren't getting enough money. Some even took the Legislature to court. The state's highest court ordered the Legislature to cough up more money.

But that was just the latest in a series of moves to bolster school spending, in the belief that doing so would improve student performance.

It hasn't.

I comment on this situation in an op-ed published by the Wichita Eagle that runs today. The link will last for a week or less, but I'll eventually put a PDF version in the publications archive.

Labels: K-12 education

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The Semi-Retired Blog
Many blogs are started with one entry, and then languish. Others, like this one, live for several years.

I've put the Policy Guy blog on a semi-retired status a while ago. I had planned to stop writing here altogether. Then I used it as the outlet for stuff to write on a once-in-a-while basis. My goal became to add one or two items a month.

Recently, though, I've lost the interest and the energy to do even that. Other duties and opportunities call. They include but are not limited to the following:

State House Call is a blog dedicated to health care policy, with a focus on state government policy. In an age when workers, business owners, union bosses and fans of the public sector agree that we need to federalize health care, State House Call takes a different approach. It points out the problems with bureaucratic control of health care (public and private) and lays out how patient-centered care works. A wise man once told me that it's impossible to say anything intelligent about health care in fewer than 1,000 words, but we try anyway, reporting in posts that range from 50 to 800 words.

The Capitol Report, of the Saint Paul Legal Ledger is a leading specialized publication in Minnesota. I write a twice-a-month column devoted to public policy. It is usually through not always about government at the state or local level, and it often discusses a new report about a public issue. You can read my back columns from this paper, as well as stuff I have written for other groups and publications, in the publications archives of the Policy Guy site.

The Flint Hills Center for Public Policy does some good work in Kansas. I write about education policy for them.

I take a more explicitly political spin on the Detroit News politics blog.

If you use Twitter, you can follow my Twitter feed.

Grays on Trays is my online publication about snowboarding. I update the blog more frequently than any other part of the site.

In addition to writing, I manage to squeeze in some editing from time to time. If you'd like me to do some editing of an op-ed, white paper or other product, drop me a line. (permalink)

If you're informed, vote.
If you aren't aware, there's an election today. If that's true of you, it's probably best for us all if you don't bother to vote. (permalink)

Following State Think Tanks? Look Here.
State-focused think tanks are putting out some interesting work on important public issues, some of which are obvious (the condition of many public schools) and some of which are hidden (such as the condition of public employee pension plans).

It's hard to keep track of them all, but RightyBlogs has aggregated most of the free market-guided state-focused think tanks that have blogs. If you're interested in state and local policy, check it out. (permalink)

Smaller Classes Lead to Better Schools? Not Quite.

For many students, the new school year will begin within a month. So here's a reprint of an article I wrote elsewhere about a popular but flaws method of improving schools.

September 24, 2007
Is small beautiful? Evaluating classroom size

A perennial fad in education policy is the idea that smaller class size improves student achievement. In 2002, Florida went so far as to write a class-size program into its constitution. Earlier this year, governors in states as politically diverse as New York and Utah embraced smaller class sizes in their state-of-the-state speeches.

School districts, meanwhile, warn that the public’s failure to endorse larger tax bills will lead to larger classes. The logic is simple enough. Teachers are important. A smaller class lets a teacher pay more attention to each student. Ergo, students in small classes do better.

There’s one problem, though. We know less than we should about the effects of class-size reduction, given its financial and opportunity costs.

Perhaps the most well-known study of smaller classes was Project STAR, conducted in Tennessee during the late 1980s. More than 6,000 students in 79 schools from rural, suburban and urban schools were involved. They were placed into one of three types of classrooms: a smaller class (on average, 15 students), a larger class (22 to 25 students), and a larger class with a full-time teacher’s aide. The experiment continued for several years, though only one-third of students continued in the same kind of classroom for three or more years. The students, who entered the project as kindergarteners, were given two different tests, and the numbers were crunched in various ways.

The researchers concluded that students benefited from being in smaller classes. Inner-city children gained the most. For students overall, most of the gains came in a student’s first year in smaller classes; by the eighth grade—long after students had left the experiment—the gains over other students were minimal.

The National Education Association, the nation’s largest teachers’ union, applauded the findings. (As well it should: a smaller workload is in essence a pay raise.) “The results: At every grade level, in every subject, at rural, suburban, and urban schools, children in small classes outperformed their peers on standardized tests every time.”



Doubters

As far back as 1996, though, doubts have crept in. The California Research Bureau warned that “since other recent demonstrations around the country have not shown results as dramatic as those found in Tennessee, any evaluation regarding the effects of class size reduction on student performance should be viewed with caution.”

Chief among the critics has been Eric A. Hanushek, an economics professor who has worked at Yale University, the University of Rochester in New York and Stanford University (and as deputy director of the Congressional Budget Office during the 1980s). Hanushek has lodged several complaints about the methodology of Project STAR, including its lack of a pre-test. It’s hard to know how well a treatment works (in this case, smaller classes) if you don’t have a benchmark to start with. He has also argued that lower-achieving students tended to drop out of the project, thus inflating the results.

Ludger Woessmann, of the Institute for Economic Research, a German organization, and Martin B. West, a research fellow at Harvard, took a cross-national approach to the question. In 2006, the European Economic Review published findings from a study of theirs that examined countries including the U.S., several in eastern and western Europe and Asian countries like Japan, Singapore and Korea. Their work found that important “class-size effects are observed only in countries with relatively low teacher salaries.” (The U.S. is not considered a low-salary country.)

Carolina Milesi and Adam Gamoran, both sociologists at the University of Wisconsin, concluded in one of their studies that there was “no evidence of class-size effects on student achievement in either reading or mathematics.” Further, they found this was true across several demographic categories, including socioeconomic status.

Practical Questions

Even if we brush off criticisms of Project STAR, there are serious questions about its merit as a guide to policy. For one, it’s very expensive. According to the Education Commission of the States (http://www.ecs.org), the federal government’s Class Size Reduction Program spent $3.5 billion on class-size efforts in a single school year, 1999-2000. In addition, the program, established in 1998, is providing roughly $1.2 billion a year to help states hire and train new teachers as part of an overall goal of lowering class size in grades one to three to at most 18 students per classroom nationwide—still higher than the Project STAR number.

But finding money to hire more teachers is just the beginning. Smaller classes work only if they are taught by quality teachers. Reducing class size by diluting the quality of the teacher pool—which a rapid expansion in the number of teachers could easily bring—is a self-defeating measure.

Class-size reduction efforts can reduce the quality of teachers in another way. Smaller classes mean more classrooms, which means significant one-time capital costs and increased and ongoing maintenance costs. Where will those funds come from? It would likely come from money that could be used for increasing teacher pay, increasing teacher training and purchasing additional technological tools, to start with.

If there’s one reform idea that seems to have nearly universal support, it’s that teacher quality must be improved. There are of course competing ideas of how that can be done. Merely ramping up the number of teachers, though, favors quantity over quality.

Labels: K-12 education, Legal-Ledger

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The Politics of Coffee

News that Starbucks is closing 500 stores reminds me of something I wrote earlier this year on the difference between the private sector and the public sector.

McDonalds thinks that they can make a lot of money by going head-to-head with Starbucks for customers of expensive coffee.

Will their plans succeed? I haven't a clue. If they fail, they will be shut down, and the company will suffer a loss.

Contrast this with any number of government programs, including city-run Internet service, economic development programs, "cool cities" nonsense, some public school systems and the like. What happens when they fail? Do they get shut down. Hardly. Thanks to the political process, they live on, and get even more money.

One way to avoid the effects of lingering ill-performing government programs is to avoid starting new programs altogether.

Labels: Detroit News

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States grading themselves on the curve
Since the latest issue of Education Next mentions how some states set low standards for schools, it's time to bring up an article I wrote on the subject last year. Nothing much has changed since then.

November 5, 2007
'No Child' leading to grade laxity

We all know about the old problem of “grade inflation.” Lately, when it comes to following the federal No Child Left Behind law, some states have been getting into the act.

Under NCLB, every state must test students to make sure each is proficient in mathematics and reading by 2014. But the law gives each state a lot of flexibility: States are free to use their own tests to comply with the law. They can also determine what score constitutes “proficient.”

That’s where things get interesting.

The Thomas B. Fordham Institute (www.edexcellence.net) is a Washington, D.C.-based organization that is generally pro-school choice. (The Institute is unrelated to Fordham University in New York.) Yet unlike school choice advocates who assail NCLB or a federal role for education, Fordham supports both the law and national (though not necessarily federal) testing.

In October, the Institute released a report that criticized states for having lax testing standards. The title of the report—“The Proficiency Illusion”—gives away the game.

The report starts with the story of a mythical family in Michigan. Susie Smith, a fourth-grader, scores very low on the state math test and yet is declared proficient. Her parents, seeing only the “proficient” label, are pleased, thinking that she is on track to doing well throughout her school years.

As a result of her state’s very low standard, however, her performance, and that of her school, is inflated. As a result, say the Fordham authors, “if Susie lived in California or Massachusetts or South Carolina, she would have missed the ‘proficiency’ cut-off by a mile.”

Imagine not just a single Smith family, but a school of Smith children, and you have a school that despite doing well by the standard of NCLB, isn’t learning much. Imagine a state of such schools, and you have a state that is systematically dumbing-down education.


Methodology
Given that states have their own tests for NCLB compliance, how did the Institute come to criticize Michigan? What prompted it to applaud both Massachusetts and South Carolina, two states not normally spoken of in the same category in education?

Twenty-six states administer the MAP (Measures of Academic Progress), which is produced by the Northwest Evaluation Association (NWEA, http://www.nwea.org). In simplest terms, the analysts from the NWEA compared a state’s performance on the MAP with its reported performance for No Child Left Behind. Then they determined which MAP percentile a student would have had to achieve to be labeled “proficient” in each state. They is the “cut score.” One limit of the report is that the MAP is given in only 26 states.

The analysts then asked three questions of each state, including “How easy is it to be proficient?”

Colorado set the lowest bar. As a matter of policy, it declared that students scoring “basic” on the state assessments would be declared “proficient”—a higher level of performance—for the purposes of NCLB. Under the law, that was its right.

Not surprisingly, the cut score for Colorado was very low. Colorado’s third-grade students had to score in only the 6th percentile on the MAP to be deemed “proficient.” The state with the highest expectations was Massachusetts. In the Bay State, a fourth-grade student who was in the 76th percentile was not considered proficient. (The cut off: 77th percentile.)

On the whole, Minnesota is more rigorous than average for both math and reading, with third grade the only grade where the state falls below the average. But for grades four through eight, Minnesota cut scores are higher than the sample average. Its least demanding cut score was third grade reading, in which the state ranked 16 out of 26. Its most demanding cut score was fifth grade mathematics, which placed at fourth out of 26.

Even so, there’s some laxity in Minnesota standards. The most demanding standard was fifth grade mathematics. There, scoring proficient on the Minnesota Comprehensive Assessment II translated into the 54th percentile on the MAP. The least demanding test was third grade math, which required only a performance at the 26th percentile.

So what does this mean for parents, voters, educators and lawmakers? For all the protests and heartache of NCLB, we’re not necessarily getting much return. States are setting the bar low, and in some cases, setting it very low. As China, India and other countries enter the world economy, though, being “better than Mississippi” doesn’t cut it anymore.

The focus on increasing student achievement is good. The stated purpose of improving the performance of all students, especially the lowest performing ones, is just. But No Child Left Behind, at least as practiced, is falling short.

The law could reap many social and economic dividends if it actually produced results. But the number of loopholes in the law, including the ability to set low thresholds for proficiency, should give observers pause. It may turn out that the most enduring legacy will be the law’s demonstration of the limits of standards-based education reform.

Labels: K-12 education, Legal-Ledger

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From "A Nation at Risk" to "Cities in Crisis"

School's out for summer. But for many kids, school's out forever--and they still don't have a diploma. Here's an article I wrote about the problem of high school dropouts.

May 5, 2008
From "A Nation at Risk” to “Cities in Crisis"

First we had "A Nation at Risk," launched a new era of school reforms. Millions of dollars and almost 25 years later, we have, according to a new report on high school dropouts, "Cities in Crisis." The more things change … the more they stay the same.

This new report is from America’s Promise Alliance, a child-welfare advocacy organization founded by former Secretary of State Colin Powell.

The report has received a lot of attention. One reason is the sheer scope of the problem that it outlines: 1.2 million students should graduate with a diploma each year, but don’t. While some people do just fine without a diploma, dropouts as a whole tend to create tremendous social costs.

While dropouts occur everywhere, author Christopher B. Swanson focused on the 50 largest cities and their surrounding metropolitan areas, whose dropout rates are twice those of student enrollment as a whole. The cities range in size from New York City (population 8.2 million) to Wichita, Kansas (population 357,698). Minneapolis was the only Minnesota city on the list, coming in as the 47th-most populous city.

Here are some of the most significant findings of the report:

The graduation rate for all students was 70 percent. Three out of 10 students don’t graduate on time—and most of those 30 percent don’t graduate at all.

Urban districts had worse graduation rates. Among the principal districts serving the largest 50 cities, the graduation rate was 52 percent.

Girls were much more likely to graduate than boys. The graduation rate was 74 percent for girls but only 66 percent for boys.

Graduation rates were much higher in suburban districts. The rate in the suburbs was 75 percent—nothing to crow about—but 60 percent in urban districts.

The racial gap is significant. Graduation rates vary greatly across groups, from 49 percent for American Indians to 80 percent for Asian-Americans.

In the Midwest, graduation rates for the largest districts ranged from 25 percent (Detroit) to 60 percent (Wichita). Minneapolis (44 percent) did worse than all but five other districts. The rate for the Twin Cities was 77 percent, putting it tied with or behind 8 other metro areas.

The reactions of various public officials were as interesting (and distressing) as the results of the report.

Some districts disputed the numbers. The superintendent of the Cleveland Public Schools said the numbers “are not accurate.” He got some support from the Ohio Department of Education, which includes graduates of summer school in its calculations.

Both Minneapolis and Atlanta administrators said their rates were 8 percent higher than the ones calculated by Swanson.

School officials might be motivated to say such things because their budgets and jobs are on the line. But they can make these claims because there are various ways of counting students in these statistics. Are special education students included or not? What counts as “completing high school?” It is completing a diploma in four years? Four years plus an extra summer school session? Is a GED good enough?

The National Center for Education Statistics (http://nces.ed.gov) recognized four different methods of calculating rates in its publication "Dropout Rates in the United States: 2005." The event dropout rate covers students who leave school during a single year. The status dropout rate reports people in an age range who are not in school and do not have a diploma or GED. The status completion rate covers people in an age range who have earned a diploma or GED, even if they took more than four years to do it. Finally, the averaged freshman graduation rate, or cohort rate, estimates the percentage of students who complete high school in four years. Swanson used this approach, which produces the largest numbers. The event rate, by contrast, produces the smallest numbers.

In response to the report, U.S. Secretary of Education Margaret Spellings announced federal efforts to standardize reporting requirements. Her position is understandable: How can the federal government do its part in administering No Child Left Behind if you can’t easily compare Ohio with Texas? The move to standardize calculations represents a further federal intrusion into what many people think should be a matter at the state level. Yet NCLB is the law of the land, and in the ways of government, one law tends to lead to another.

In addition to pointing to their interpretation of the numbers, some state and school officials pointed to their good intentions. An official with the Kansas City, Mo., schools said “It’s not the place where we want to be. What matters is where we are going.”

Others emphasized recent actions they’ve taken. Officials in Kansas City, Kan., said they have moved in recent years to deal with dropouts. Leaders of the Boston school district said they did their own study last year, and have started new efforts. An official with the Minneapolis Public Schools told the StarTribune "We've improved a lot since then."

Certainly, some schools have seen improvements, and graduating three months later (see Ohio) is better than not graduating at all, even if that does imply extra public spending.

Regardless of who you count or how you crank the numbers, there are still far too many students who aren’t completing high school on time. What can be done about it? Various and competing proposals abound, but I hope that we won’t have to read a similar report in another 25 years.

Labels: K-12 education, Legal-Ledger

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No Prices, No Progress

This next item is the most widely-read item I published on another web site.


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No Prices, No Progress

Single payer makes health care simple, advocates tell us. How cute and charming. And nonsensical--to try to operate without prices.

When I read that under a proposal that draws at least some interest from Minnesota’s Rep. Keith Ellison, "Physicians and other health care staff are reimbursed within 30 days of service ... " my first thought was "And what price do they get reimbursed at?"

Before I clicked through to the original article, I thought "Perhaps it’s some made up price."

And so I continued reading " ... and that reimbursement would be mandated to be at current pay grade."

Pay grade? Perhaps Mr. Segal, legislative aide to Rep. John Conyers (D-Mich.) [and advocate of the idea] is referring to the Diagnostic Rate Groups (DRGs) used by Medicare. Great. If there’s any government program that is more convoluted and complicated than the internal revenue code, it’s Medicare and its DRGs. Yeah, right. More price-setting by government.

What we have in single-payer systems ... or at least any single-payer system that incorporates enough of the population to have market power ... is an attempt to allocate resources without prices. When you don’t use prices, you end up-—when government is the purchaser—-using politics. And with that comes rationing, political favoritism, misplaced priorities (bridges to nowhere), and a host of other ills.

This isn’t to say that that American health care policy is great. It isn’t. Government has too much power. So do corporate HR departments, and "non-profit" hospitals that operate in a quasi-monopolistic environment.

Can the status quo endure for long? I don’t think so. We’re going to complete the government takeover of health care, in which case politics will decide who gets treated, how diseases are treated, and so forth. Or we’re going to make a greater use of prices, in which people actually ask for the price of a treatment, medical providers actually have real prices, and trusted third parties help people decide among options.

For further reading on the topic, I’d recommend three resources. One is The Cure: How Capitalism Can Save American Health Care and Who Killed Health Care? are two great books. Who Killed Health Care? sketches out how the medical industry will have to adapt to greater use of market forces to fulfill its potential. Another resource is the web site State House Call, which focuses on state-level efforts to bring either greater political control or greater freedom to health care. (permalink)

With a new book on "disruptive changes" for education on the horizon (see Education Next for a preview), it's time to print an essay I wrote about virtual schools.

May 7, 2007
When going to school means going online

With Internet-based technologies challenging business models in many industries, it was only a matter of time before they started to challenge K-12 education. Policymakers who feel the need to catch up with these changes should resist the temptation to blindly apply old-school regulations to the new environment.

Online learning is growing rapidly. “Education Week,” the trade magazine of K-12 education, says that its use may have grown 20-fold during the last five years. There are now anywhere from 750,000 to 1 million registrations for online courses.

Some online tools involve people interacting at the same time, such as chats, Web seminars or simulations. Others applications, such as e-mail or discussion forums, are used at a participant’s leisure. Depending on the tool and instructional method, an online student may interact with a teacher only occasionally or on a fixed schedule. Interaction among students taking online courses, meanwhile, can vary from little to extensive.

Online learning is more than simply playing a videotape in a classroom. Thanks to charter school laws, an entirely new institution has been born: the virtual charter school. These public schools, free from some of the regulations that hamper traditional schools, are free to draw students from around a state, country or beyond.

Online learning can have several advantages for students. The most obvious is a flexible schedule for those people who for whatever reason (sports, a budding business, family obligations) cannot be present in a classroom on a regular basis. Students can use online schooling to their local school experience, or replace it entirely. Some parents might find online learning, with its ready-made curriculum and instructional support, an attractive alternative to home schooling.

School districts and communities can benefit, too. School districts with small enrollments can supplement their class offerings, making small schools viable. A small but enterprising district that creates an attractive product, it can snare state dollars from students who enroll from other districts.

Online learning can also be used to help a school help meet various state or federal requirements. The Louisiana Virtual School, for example, offers a hybrid class that pairs classroom teachers who are not certified in algebra with an online teacher who is.

Communities also benefit when parents, who no longer feel like they must move to offer their children more educational options, can remain as employers, business owners, and participants in civic life.

Challenges for Policy Makers
While virtual schools can be a godsend to many people, they present a lot of questions for policymakers—as well as a challenge to the status quo.

Denver-based Evergreen Consulting Associates has been tracking the development of online learning. Its annual publication “Keeping Pace with K-12 Online Learning” reviews the questions that states are asking. Let’s discuss a few of them now.

How much does online schooling cost? There is no agreement on whether online virtual schools should cost less than bricks-and-mortar schools. Some observers argue that virtual schools don’t cost less, they just have different costs.

How should online schooling be funded? Options vary. The Michigan Virtual High School was given $18 million in seed money from the legislature and is still partially funded by annual appropriations and grants.

The Florida Virtual School, on the other hand, receives money based on full-time equivalent student enrollment, similar to a traditional school. As the Evergreen report notes, this approach offers a more predictable funding stream than annual appropriations, which are more often discretionary and subject to budget cycles.

Can a student enroll in an online course anywhere? Some states require students to obtain the permission of their local district before taking online classes elsewhere; others do not.

Does the money follow the student? In Minnesota, an online program that enrolls a student gets only 88 percent of the general education revenue normally allocated for that student. The balance goes to student’s district of residence on the theory that the district still incurs certain costs for students who attend elsewhere.

Two years ago, the Ohio legislature put a moratorium on the creation of virtual charter schools. Among the reasons, says Evergreen: “Enrollment in eCommunity schools has contributed to decreased enrollment in many public school districts.”

Given the poor quality of many schools in Ohio, it’s not surprising that nearly 21,000 students enrolled in the state’s virtual charter schools.

As the technologies grow, teachers adapt and word of online learning spreads, policymakers will face many challenges in responding to competing claims on public dollars. As the Ohio cases bears witness, policymakers must ask the question: how can the public best finance not merely schools, but education?

Labels: K-12 education, Legal-Ledger

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Now Where is the Handbasket When I Need It?
You know what they say about the difference between a recession and a depression: A recession is when your neighbor loses his job. A depression is when you lose your job.

Michigan has been in a one-state recession for a long time, though perhaps the nation has joined it (we're still waiting on the numbers). But from some contacts I have with the state, there's certainly a woe-is-us mood in the air. (Then again, I could have a biased sample).

Earlier this year I made several comments about the Michigan economy and the economy in general in the politics forum of the Detroit News blog, where I'm one of the featured writers.

Here we go. Each item in bold is was a separate blog entry; and the links didn't make it over here.

Fat People, Fat Houses, and Lots of Debt
Some people will tell you that the American middle class is being squeezed by greedy corporations and corrupt politicians. They're being squeezed, all right: They've got too much stuff.

So says a study from UCLA anthropology professor Jeanne Arnold, who poked into the garages of a group of middle-class families and observed how much time they spent in their backyard pools.

Author Jeanne Arnold says that for the families she looked at, "most cars can't fit in garages because they're too full of clutter from the house." Further, she said "(f)rom construction materials to excess furniture and toys, storage of material goods has become an overwhelming burden for most middle-class families." She estimates that 75% of families in Southern California suffer a "storage crisis."

Think that debt is piled on by sneaky mortgage brokers? Think again. Arnold concludes that many families in her study " seem to fuel their stress and frustration by buying more possessions than their homes can absorb, adding to their debt."

America's greatest nutrition problem is not lack of food, it's obesity. Perhaps its greatest economic problem is yet another form of obesity.

The Myth of Income Stagnation
Have American incomes stagnated over the last few decades? That may be what you hear now that we're in political silly season. But it's simply not true.

By one estimate, using Census Bureau numbers, the median family income was up 23% between 1973 and 2005 (the last year for which numbers are available). That these numbers reflect the median rather than mean incomes is even better; it reflect a widespread growth. In fact, there are reasons to think that official numbers underestimate income growth.

La, La, La, I Can't Hear You!
So Libby (and some other people, I would guess) think that I'm selling "voodoo economics."

Sure. The Census Bureau (from which I drew my numbers) has entered the black arts?

More remarkable is this claim: "You can wave all the statistics around that you like ...," which strikes me a lot like saying "la, la, la, I can't hear you."

There's a lot of political gain to be made, by both Democrats and Republicans, in the idea that (say) 5,000 people in the country are living large while the rest of us are eating dog food for dinner.

It just ain't so. Yes, many people will face hard times at various points in their lives (I could tell you my own stories of draining fast-food grease pits at 3 a.m.), but by any objective standard Americans are materially better off than they were decades ago.

By way of judging material well-being, I offer as exhibit A the fact that our garages are loaded with personal belongings, and companies such as Got Junk, Pack Rat and Public Storage exist to deal with the overflow of our possessions.

Doesn't look like gloom and doom to me.

Livin' Large in the USA
In response to my comment on the storage business as indicator of American prosperity, Mako left this comment: "The success of storage space is simply a reflection of our society's temporary status, where either we move every few years, or that we're simply running out of whatever space we have left."

He's right; some of those storage units are full because people move, and we are a mobile society. Then again, the fact that we have stuff to store only reinforces the point that there's lot of prosperity going around. It's easy to forget the trend towards improvements in the material standard of living when news media focus (as they often do) on hardship and the politician, who hopes you'll see him as a savior, preaches a message of gloom and doom.

Here's another indicator of the long-range growth of American prosperity, though: houses have gotten bigger over time. Says the Dallas Morning News, Average home sizes have grown by more than 50% since the early 1970s, while the number of people in most households is shrinking.

Lots of Progress in 14 Years
If you've left dial-up a long time ago, you might enjoy this spoof of the TV show "24," circa 1994. It shows how much positive change to the Internet and everyday communications has been brought about--largely through profit-seeking businesses.

There's a certain strand of political thought--I'll refrain from trying to invoke a clever name--that focuses on redistributing wealth. One reason, perhaps, is that it focuses on gloom and doom, and think that there's a fixed amount of material well-being to go around. Watch the spoof, and you'll see how things have changed in just a few years.


Brother Can You Spare an Apocalyptic Vision?
A fundamental element of sales is the plan-meet-need strategy. You have a need, I've got a plan.

It's easier for a politician to get you to give up something you have if you think that the sky is falling. (Of course, it's easier in all cases for him to get your permission to wrest something from someone else and give it to you.)

How Poor is Poor?
In response to my recent comments on the historic rise in American well-being, Libby Spencer predicts an "economic gloom and doom that's descending on America." My own remarks get a dismissal as "glibertarian." Hey, I suppose that beats "fascist." (Be grateful for small favors?)

In any case, it's understandable that people focus on the latest news, and especially their own immediate situation. But it can also lead to a profound misunderstanding of the world. (And yes, I see the stock market is sinking today.)

The idea that the well-being of the family that founded Wal-Mart somehow means that we're all going to be out on street corners selling apples and collecting tin cups (Libby's latest argument) is & well, rather absurd. Nobody is forced to shop at Wal-Mart, which is where it is because it serves the needs and wants of millions of people every day. Customers vote with their dollars, deciding that they'd rather have the stuff from Wallyworld than the dollars they give up.

In any case, I don't expect to see, even in Michigan, large numbers of people standing on corners selling apples, a la the Great Depression.

For one thing, would-be apple-sellers would be put out of business by nanny-state bureaucrats for selling without a permit. For their own good, of course.

I'll close by pointing out one area where I would wholeheartedly agree with Libby: taxpayer support of professional sports teams is a bad idea. Not because team owners are multi-millionaires--that's icing on the rhetorical cake--but because funding a private entertainment business with taxpayer funds it a perversion of government's role. This would be the case even if sports stars earned the minimum wage.

In response to a recent blog entry of mine, blog reader "ConservativeGuru" had this to say: "I am sure many of the people Libby is predicting selling apples by the roadside, will drive back home in their shiny new pickup, pull a six pack from the fridge, plop down in their laz-e-boy, flip on their HD digital cable infused 50" plasma TV, pick up their phone and gab away for an hour with a friend 2000 miles away bemoaning their situation and Michigans bad economy."

I can't predict what any particular person will do, but Hans Bader seems to agree: "most people classified as poor by the federal government are actually not poor at all. Most people below the federal poverty line have a living standard that is higher than most Europeans', and higher than what Americans enjoyed in past generations."

Labels: Economics

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Damn it, I'm a Man
The song for this morning is Bob Seger's 1980s tune Feel Like a Number.

I'm not a number
I'm not a number
Dammit I'm a man
I said I'm a man

Two recent phone calls to various businesses bring this song to mind.

Business A:

"Hello this is ___. May I have your account number?"

Business B:

"Thank you for calling ___. May I have your phone number?"

Hey, at least let me give my name first. Granted, some customers can go on and on if you let them. A good customer-service rep will have a way of keeping logorrhea at bay.

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Wealthy School Districts, Lousy Schools
If you want good schools, spending a lot of money is no guarantee. That's true whether you're talking about aggregate spending numbers, or a more personal concern--the amount of your mortgage. Here's something I wrote on the topic last year.

California Dreamin': Delusions About School Performance can Hurt Families in the Pocketbook

December 10, 2008

If the three most important words in real estate are “location, location, location,” the most important question for families might be “How good are the schools?”

Think about how many families you know who paid as much or even more than they could afford to buy a house because they believe the house is in a neighborhood with good schools.

The poor performance of many high-poverty schools is well known. But in a recently released book titled “Not As Good as You Think: Why the Middle Class Needs School Choice,” the San Francisco-based conservative think tank Pacific Research Institute (www.pacificresearch.org) warns that middle and upper-class suburbanites might need to reconsider whether their outstanding schools are in fact outstanding.

Authors Lance T. Izumi, Vicki E. Murray and Rachel S. Chaney focus their attention on California schools, but their work is valuable to anyone interested in real estate or education.

The single largest section of the book describes the academic state of what the authors call “underperforming” schools. First they identified “nonpoor schools,” or schools in which less than one-third of students participate in the school lunch program. Then in a crude but powerful test, they identified as underperforming any school that “had over 50 percent of students below proficiency in at least one grade level” on the state’s English or mathematics exam.

The result is “The Upscale Real Estate Guide to Underperforming Schools,” a pull-out feature of the book that lists 284 “underperforming” public schools, some with rather upscale demographic profiles.

Nearly all the schools on the list have a ZIP code in which the median home value is more than $300,000. More than half have a value above $500,000. One even has a median value of $1.63 million. Clearly, many people pay lot of money for the opportunity to send their children to these schools.

The book contains narrative descriptions of famous and wealthy communities in which these schools reside. They include Silicon Valley; Burbank (home to NBC); Huntington Beach (known as “Surf City USA”) and several towns in wine-producing Sonoma County.

We read, for example, that the San Francisco Bay area city of San Mateo is home to Hillsdale High, which boasts a ZIP code where the median home price is $867,000. Not even 8 percent of students are in the federal lunch program, yet only 40 percent of 11th-grade students are proficient in English. More troubling, performance on that test drops 27 points between the ninth and 11th grades.

The underperforming schools are found throughout the state, in both the more expensive coastal cites and the less expensive interior ones.

Political allegiances make no differences. Underperforming schools are found in “red” areas such as Orange County, in Southern California. They are also in the famously “blue”—and famously wealthy—San Francisco Bay area. By the way, those schools are not in poorer Oakland, but in prosperous Marin County, where George W. Bush lost twice, both times by a landslide.

Some schools on the list are in cities that host the state’s leading institutions of higher education, including Berkeley, San Diego, and Santa Cruz. Carlsbad and Chino are among the cities in which close to a quarter of the population has a graduate degree. In other words, these are not communities of struggling-to-survive families with minimal education.

In an illustration of the schizophrenic nature of school ratings, some of the schools on the underperforming list have been dubbed by the state as a “California Distinguished School.” One example is the Richard Gahr High School in Los Angeles County. Only 47 percent of ninth-grade students there are proficient in English. And don’t blame immigrants: only 6.5 percent of the students are “English-language learners.”

As with any study, there are some limitations to this book. The narratives read too much like a travel guide at times, even if they do show that famous cities can have weak schools. One sharp feature of the narratives is the interspersing of positive parent-written school reviews from the web site Great Schools (www.greatschools.net). The proximity of warm words and cold, hard, facts is jarring.

I wish the book had put the real estate prices into perspective. California’s real estate prices are legendary, and I found nothing in the book to compare the home values of the selected districts to the state.

The online version of the book repeatedly mentions the “Upscale Real Estate Guide.” I had to rely on a web search to find it, however. As it turns out, a blogger had a link to the guide as a separate document, which is back on the Pacific Research site.

The book has other large sections that I haven’t touched upon here, so there is much for policymakers and citizens alike to consider. The costs, both emotional and financial, that homeowners incur by getting into “good schools” may cause them to overestimate actual school performance. That can lead to a complacency that is harmful to us all, especially the children.

Labels: K-12 education

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Tax Day 2008.
It's the ugliest day of the year, isn't it? Pay your taxes for all those counterproductive, wasteful federal and state programs--and a handful of useful things, too.

But the burden of government is not confined to what happens when you write a check. There's also the time required to gather forms, assemble papers and take on other tasks. For example, it took an hour out of my day last week to drive to my tax-preparer's office to pick up the forms.

By the way, here's one (often mentioned) way to make our tax burden sensible: do away with withholding. Make everyone write quarterly checks, or even a yearly one, for their taxes.

Did you know that you work until late April every year just to pay your taxes? This year, April 23 is "Tax Freedom Day," says the Tax Foundation.

If you need a pick-me-up, try out their blog post tax humor.

No, I didn't find it that funny, either.

Labels: Taxes

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Two Reports on Education
School's out for summer, but school taxes are collected year-round. So here's a column I wrote about schools.

March 27, 2008

Minnesota No 1. for charter schools
New report questions whether more money translates into scholastic achievement

Minnesota has been garnering some national praise for education of late. One piece is significant; another, less so.

In February, the Center for Education Reform (www.edreform.com) ranked Minnesota as having the best laws governing charter schools. The state’s high ranking came from several factors that the center says correlate with a vibrant charter school environment, including placing no cap on the number of charter schools in the state and using multiple authorizers to oversee charter schools. Last year, legislators were wise to refuse a proposal to place a cap on these schools, some of which produce results that cannot be replicated by traditional public schools.

Also in February, Minnesota earned another No. 1 ranking when the American Legislative Exchange Council (www.alec.org) issued its 2007 report card for the states. ALEC, as it is commonly known, is a voluntary membership organization of conservative state legislators.

The ALEC report is chock-full of data that lawmakers and parents might wish to chew on. Most of the data come from the usual official sources such as the National Center for Education Statistics and are conveniently assembled in one place.

There is, for example, a snapshot of data for each state and the District of Columbia. The one-page summary includes information on achievement, spending, demographics and charter schools.

After the snapshots come the data tables, and lots of them. Chapter 1 has 12 tables dealing with inputs into public schooling, such as the number of instructional staff and per-pupil spending.

Chapters 2 and 3 cover various measures of achievement for both the country as a whole and for each state. It’s an alphabet soup of scores: the ACT, the SAT, and the NAEP.

What has happened to performance over time?

Scores on the NAEP (“the nation’s report card”) have been flat over the long run despite increases in spending; SAT scores have declined 2.1 percent. The ACT has been recalibrated fairly recently, so long-term observations are not possible.

Simple plots of each state’s inputs and outputs suggest that the relationship between the two is less straightforward than you might think. For example, the correlation lines between pupil-teacher ratios and NAEP scores or per-pupil spending and NAEP scores are nearly flat, not upward sloping as suggested by the theory that “you’ve got to spend more to get more.”

The report offers the raw score on the NAEP mathematics and reading tests for both fourth and eighth grade, as well as the percentage of students in the state who score proficient or better on these subjects. It also has each state’s average score on the ACT and SAT. (Since states tend to use either the ACT or SAT, it also gives the percentage of students taking the test).

Finally, each state is given a rank on each piece of data. On eighth-grade math, for example, the Top 5 finishers in terms scale score and percentage of proficient students are Massachusetts, Minnesota, North Dakota, Vermont and Kansas.

Resulting questions
Looking at the various tables raises some questions. Massachusetts, for example, scores first in eighth-grade math but only 10th in students per teacher. Is there something about the curriculum in the Bay State that makes up for not having the lowest class sizes? Are the teachers better in math than elsewhere?

The most interesting and controversial element of the report is the attempt to construct a composite rank of each state’s effectiveness, which combines scores on NAEP, the ACT and the SAT. It’s here that Minnesota gets the No. 1 ranking, followed by Massachusetts and Vermont.

Andrew T. LeFevre, the report’s author, then uses regression analysis to test two propositions.

The first is that a state’s ranking on inputs (money and staff) during the 2005-06 school year can predict its academic performance during the 2006-07 school year.

The second is that changes in a state’s inputs will predict its changes in SAT score between 1985 and 2005. In short, can money buy results?

The short answer, says LeFevre, is no. “More schools, more school districts, a lower pupil-to-teacher ratio, higher expenditures per students, higher teacher salaries, federal involvement in primary and secondary education together do not improve performance as measured by average standardized test scores.”

When it comes to individual inputs, having fewer students per school does help, as, oddly enough, does having more students per class.

So what do we make of this report? I happen to agree with the report’s conclusion that expanded school choice is an important part of improving education.

But the analysis supporting it problematic. Take, for example, the ranking of states on either a single measure (eighth-grade math) or on a composite one. Is the difference between the 10th state the 11th state on the NAEP statistically significant? If not, running a regression of spending against math scores doesn’t help us.

Neither does adding many such ranks to form a composite rank.

Perhaps those rank differences are statistically significant, which is to say, real and not a result of chance or measurement error. But it’s impossible to tell from the report.

Proposals to improve education typically center over how much to add to inputs without much regard to the structure.

The charter school idea, enunciated by the Center for Education Reform, does focus on structure. It promotes changes on both on the supply side (by making it easier for educators with new ideas to get them implemented) and on the supply side (giving parents more options to choose from).

For that reason, the lessons of the charter school report card may be the most significant and enduring.

Labels: K-12 education, Legal-Ledger

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If we remove schools from the culture wars, maybe we'll find better schools

Since this next item came out on Christmas Eve, it was rather topical on its date of publication. Nothing much has changed since then, however.

December 24, 2007

One reason why children don’t know as much as they should may be that we expect public schools to do too much—or at least do things they aren’t suited for.

We expect schools to teach science, math, and literature. But we also want them to promote social cohesion and national unity.

The National Education Association says “A pure voucher system would only encourage economic, racial, ethnic, and religious stratification in our society. America’s success has been built on our ability to unify our diverse populations.” The group People for the American Way agrees, saying “public education is the cornerstone of a democratic society.”

Meanwhile, some conservative groups such as the Eagle Forum assert that public schools have lost their way by venturing into multiculturalism and undermining parental authority.

Regardless of their specific position on questions of the day, then, various groups of different stripes agree that promoting social unity is a key role of schools.

But Does it Work?
Do schools in fact serve a cultural as well as an academic purpose? The notion that our public schools are an essential factor in creating an essential unity in this country was challenged earlier this year by Neal McCluskey, a policy analyst at the Cato Institute (www.cato.org). McCluskey’s report, "Why We Fight: How Public Schools Cause Social Conflict,” offers a catalog of school-centered social conflicts that stretches back more than 160 years.

McCluskey’s report has three main components. The first is a catalog of cultural disputes during the 2005-06 school year. The second reaches back to the American founding and moves toward the present to discuss reformers and controversies. The third section argues that economic and freedom, not public schools, has brought social integration.

McCluskey clustered the events of 2005-06 into eight “national flashpoints.” Intelligent design was the turning point for school board elections in and Kansas and Ohio. Freedom of expression, or the perennial dispute between students’ desire to speak out on political issues and administrators’ interest in keeping social peace, was a second. The remaining flashpoints were race, book banning, multiculturalism, sex education, homosexuality, and religion.

The segment on American history shows that these controversies are timeless. A community is divided over whether schools should have bilingual education or practice immersion. Is this a scene from 2005? Could be, but it’s not. Actually, it’s from the 1880s, when ethnic Germans in Illinois and Wisconsin vigorously opposed a plan for compulsory education that would have mandated English-only instruction.

The desire to see religious views represented—or removed—from schools is nothing new, either. Violent confrontation wracked Philadelphia in 1844. The dispute? Should the Catholic Bible or the Protestant one be used to teach reading?

Government was instrumental in perpetuating slavery, and Jim Crow laws regarding education continued the legacy, until Brown v. Board of Education was decided in 1954. One response to the shameful legacy of slavery, the forced busing of children for racial purposes, has been met with grumbling among blacks and whites alike, if not worse. In the 1970s, the mayor of Boston compared the dispute over busing there to the atmosphere of Belfast, Ireland. So much for schools being a source of unity.

Government=Politics
The lesson behind these examples? When the schools are run by government—and that’s what we mean when we talk about “public schools,”—differences in opinion will inevitably be political. Government officials make the decisions about school speech, religion, and other subjects on behalf of students and the taxpayers who fund the schools. How can politics not be involved?

Politics means disagreements, and disagreements over education can get especially nasty. The political debate over education can heat up for several reasons, which might be summed up as “That’s my money;” and “This is my country,” and “That’s my child.”

“That’s my money” refers to the taxes that one pays to schools. Many people will some decision of the school that they don’t like, and object to how the money is spent. That’s true of any unit of government.

“This is my country” refers to the desire to see one’s views on value questions reflected in public policy. As long as a unit of government is in the business of endorsing a particular view of sexuality, for example, people are going to pay attention to that unit of government. In this case, it’s the schools.

“That’s my child” is of course the most personal concern and provides the strongest of motivations. Opting out of a local school district can incur substantial costs, leaving plenty of motivation to fight.

McCluskey argues that school choice is the only solution to social disputes, and that the pursuit of commerce can promote social integration. I tend to agree with him. A one-size-fits-all system has not brought about social peace. Benjamin Rush, one of the founders of America, proposed that states aim to produce a “more homogenous” population through a system of government schools. That strikes me, and I suspect people of various political stripes, as a profoundly unattractive idea.

Voluntary associations such as churches and synagogues, neighborhood associations, business groups, trade unions and fraternal organizations, on the other hand, promote social bonds without the entanglements of government. McCluskey adds that commercial interchange among various groups promotes these other bonds.

If we abandon the idea that the political process is the best way to determine curriculums and run schools, perhaps we’ll have enough energy to make sure that Johnny can read after all.

Labels: K-12 education, Legal-Ledger

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Boosting Public Parks through Private Parties

Springtime is underway, which means that visits to local, state and federal parks will soon increase. One way improve their condition is to make more use of the private sector, as I described in this column from last year.

Funding public parks through private incentives

August 6, 2007

It's summertime, which means that a lot of people are enjoying public lands, including state parks. The dire financial woes of national parks is well known, but state parks are not immune to trouble. The state-government-focused news service Stateline.org says, "Insufficient state funding and rising costs have left some state park systems struggling to make ends meet."

So what should park systems do? Some have responded to having less by doing less. They've cut back on maintenance and offer fewer hours of service. Some non-profit groups and legislators, meanwhile, want to promote hiking trails and other outdoor amenities by hiking sales tax rates.

But is there any other way of addressing the needs of parks? According to the folks at PERC, the Property and Environment Research Center (www.perc.org), states need to push their park systems to be entrepreneurial and self-supporting, embracing private-public partnerships, voluntarism, and differential pricing. It's an approach that has detractors. It is also one that should be used whenever possible.

A report published in October 2006, "State Parks' Progress Toward Self-Sufficiency," surveyed 30 parks systems across the country. PERC found that states are turning to "expanded user fees, concession contracts, 'friends' groups, corporate sponsorships, and endowment funds."

Raising entrance fees to parking lots, camp grounds, and other park features is one option. A variation on that model is differential pricing, just like movie theaters or restaurants. Camp on the weekend during the high season, and you pay more.

State are also turning to contracts with private vendors to run food stands, lodging and reservation services, golf courses, and other features that may have been operated in the past by government employees. The state receives a portion of the proceeds, while the vendor assumes the financial risk and burden of being the employer.

"Friends" groups, meanwhile, are useful for raising money, adding another stream of user fees. Delaware drew upon the Delaware Community Foundation to establish a trust fund to help finance state park operations.

Friends also provide labor for maintenance tasks. In New Jersey, for example, volunteer groups provide the labor equivalent of 55 full-time employees.

Some states take advantage of the natural assets of the parks to support their park systems. Maine sells drinking water to the Poland Springs Bottling Company. Drink a bottle of Poland Springs, and support Maine parks. If you're looking for a ski destination this winter, head to Vermont. Its parks are nearly entirely self-supporting, aided by the state's practice of leasing land for ski resorts.

There are several benefits of running parks more like a business. One is that it puts parks more in touch with the desires of its visitors.

In an entrepreneurial model, park revenues return to the park system, or even the individual park, rather than go into the state general fund. This way, park managers have personal incentives to listen to park users. The responsive managers have a better handle on the wants and needs of their customers than do staffers working in offices far away in the state capital.

Health care and education take up the bulk of most states' budgets, and parks can easily get crowded out. The demand for health care and education dollars isn't going to subside anytime soon, leaving parks out as a poor cousin.

User fees raise hackles, of course. One argument is that citizens should not be charged to use a public asset. That's a plausible argument. Yet in a variety of situations, "public" doesn't mean "free of charge." Think of municipal-owned golf courses, events at public arenas, and even late fees or rental fees at the public library.

Another argument is that user fees require citizens to pay again for parks already purchased. Yet that ignores the cost of ongoing maintenance. Every homeowner knows that the acquisition price is only one element of the cost of ownership.

Applying the rules of business will also offend those people who object to commerce in parks, or commerce period. For many of us, part of the enjoyment of being in a park is getting away from the world of money and commerce. Still others take it further and believe that letting someone make a buck through offering park services is offensive on its face, a near sacrilege.

Yet as economics 101 reminds us, the world is filled with scarcity: unlimited wants and limited means of fulfilling those wants. The exchange of dollars for services—in this case, access to recreational opportunities—is one way of responding to that situation. Making parks more entrepreneurial can make sure that these vital treasures aren't neglected in the circus of the budget process.

Labels: Legal-Ledger, privatization

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State and Local Regulations Drive up Cost of Housing

Yet another chapter in a book that could be titled "There's no such thing as a free lunch." This theme: regulations meant to control the size, appearance, location, design and construction of housing also drive up the price of housing--sometimes dramatically.

Housing Policy Perils

Seattle: 44 percent of housing prices driven by regulations
February 25, 2008


Any student in Econ 101 can tell you the two words that determine the price of any item: "supply" and "demand." Two other words, however, are almost as important: "government" and "regulation."

Regulations allegedly bring benefits, such as improvements in product safety. But they also add costs to the things we buy, including our housing. Laws that govern who can build a house, where they can build, what they can build, and how they build it all figure into the cost of housing.

It's easy to overlook or underestimate the affects of regulations. Theo Eicher, a professor of economics at the University of Washington in Seattle, looked at the relationship between regulation and housing prices. Though his report focuses on five cities in Washington, it has lessons for people in cities everywhere.

Eicher’s report, "Growth Management, Land Use Regulations, and Housing Prices," is available on the university’s web site.

To study the relationship between housing prices and regulations, Eicher used a database compiled by the Wharton School of Business at the University of Pennsylvania. The database covers 2,730 cities nationwide and includes 70 variables for each city, each having some effect on the supply of housing. The variables fall into three categories: urban growth boundaries, density requirements, and construction delays caused by regulations. Some of them are binary (either the regulation exists or it doesn’t), while others are on a scale (very little, very much and so forth.) Eicher used the common technique of regression analysis to analyze the data.

Findings

Of the five cities in Washington, the effect of regulation was most significant in Seattle. Inflation accounts for some of the increase in housing prices. But after that, 80 percent of the increase in the median housing price between 1989 and 2006 was due to government land-use regulations. In 2006, the median price was a staggering $447,000, and 44 percent of that was due to government regulations. Eicher discovered similar though not as dramatic results in Tacoma, Vancouver, Everett and Kent. Statewide regulations were important in all cities. City regulations were much more costly in Seattle than in the other cities. In Seattle, then, city regulations compounded the cost of state regulations.

The data tables in Eicher’s report have some interesting points for Minnesotans. Hawaii is the state with the costliest land-use regulations. Minnesota ranks 17th, meaning that only 16 other states have greater restrictions. It is slightly more restrictive than Wisconsin (19) but much more restrictive than South Dakota (47), and more so than any Midwestern state. The fact that Minnesota is a regional outlier shows up in the rankings of cities as well. Of the top 50 major metropolitan areas, the Twin Cities rank as the 22nd most expensive, higher than any other Midwestern city. (Milwaukee is 25; Chicago is 29; St. Louis is 45 and Kansas City is 47.)

Implications

Cities, states, and regional governments impose a variety of requirements on the use of land. Portland, Oregon (rank: 24) uses an urban growth boundary, as does Minnesota’s Metropolitan Council. Other regulations include comprehensive plans; restrictions on so-called McMansions; set-aside requirements for natural habitats; impact fees for new housing; design review boards; and so forth.

Each regulation on the development and use of land is implemented with specific goals: combating sprawl; preserving the character of an area; preserving the natural environment from change; or providing for green space. New restrictions are being proposed all the time, including those responding to global warming, promoting mass transit and other ostensibly worthy goals.

Each restriction has a cost. Statewide and regional rules tie the hands of local officials. As Eicher demonstrates, regulations have financial costs that affect the affordability of housing. True to his calling as an economist, he lays out the numbers and leaves the decision of what to do with them to others. “This analysis,” he writes, “does not address whether more regulations are better or worse.”

So the political scientist, the policy analyst and the citizen all must ask “are we better or worse off as a result of these regulations?”

It depends on who you are, and where you sit. If you can afford expensive housing, you may think that these regulations are good: They keep out the riff-raff and (through green space regulations) promote a visually appealing environment. If you’re already a homeowner, restrictions on the supply of housing make your house more valuable. If you can’t afford expensive housing, these regulations aren’t so useful.

As with laws and regulation generally, not all the effects of land use controls are visible. We can see the impact fees being added to the city budget. We can see the parks and green space that they fund. We can count the number of people who attend a public meeting. Hey, democracy in action!

But there are many important things going on that we can’t see: Some people are denied the opportunity to purchase a house because society has, through government, increased the cost of housing. (Since apartments substitute for houses, it’s likely that there is an effect on rents, too.)

Regulations are established through the political process. As Eicher points out, they have real-world consequences.

Labels: housing, Legal-Ledger

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Minnesota is #1 for Charter Schools
Here’s a #1 ranking that Minnesota can be proud of. According to an annual report card report card published by the Center for Education Reform, Minnesota has the strongest charter school laws of any state. That is, charter schools are more secure here, and have a better chance of having an effect on education than anywhere in any other state.

Under the center’s framework, a strong law is one that makes it relatively easy to start and operate a charter school, and have fiscal and legal independence from school districts. Incredibly, in some states charter school applicants must first secure the permission of the local school district within whose boundaries they will operate. That’s like making Burger King ask for permission to set up a store inside a McDonalds.

Minnesota gets credit for, among other things:

• Giving charters legal and fiscal independence;
  
• Not imposing a cap on the number of charters;
  
• Allowing a variety of organizations to approve and oversee charters (in addition, of course, to the state department of education).

Despite the fact that the national charter school movement started in Minnesota, charter schools still face opposition from vested interests. In the Winter 2008 edition of Education Next, Ember Reichgott Junge describes how her support of charter schools was one factor in her loss to Keith Ellison in the Fifth District primary.

Labels: Charter schools

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No Prices, No Progress
Single payer makes health care simple, advocates tell us. How cute and charming. And nonsensical--to try to operate without prices.

When I read that under a proposal that draws at least some interest from Minnesota’s Rep. Keith Ellison, "Physicians and other health care staff are reimbursed within 30 days of service ..." my first thought was "And what price do they get reimbursed at?"

Before I clicked through to the original article, I thought “Perhaps it’s some made up price.”

And so I continued reading “ … and that reimbursement would be mandated to be at current pay grade.”

Pay grade? Perhaps Mr. Segal, legislative aide to Rep. John Conyers (D-Mich.) is referring to the Diagnostic Rate Groups (DRGs) used by Medicare. Great. If there’s any government program that is more convoluted and complicated than the internal revenue code, it’s Medicare and its DRGs. Yeah, right. More price-setting by government.

What we have in single-payer systems … or at least any single-payer system that incorporates enough of the population to have market power … is an attempt to allocate resources without prices. When you don’t use prices, you end up—when government is the purchaser—using politics. And with that comes rationing, political favoritism, misplaced priorities (bridges to nowhere), and a host of other ills.

This isn’t to say that that American health care policy is great. It isn’t. Government has too much power. So do corporate HR departments, and “non-profit” hospitals that operate in a quasi-monopolistic environment.

Can the status quo endure for long? I don’t think so. We’re going to complete the government takeover of health care, in which case politics will decide who gets treated, how diseases are treated, and so forth. Or we’re going to make a greater use of prices, in which people actually ask for the price of a treatment, medical providers actually have real prices, and trusted third parties help people decide among options.

For further reading on the topic, I’d recommend three resources. One is The Cure: How Capitalism Can Save American Health Care and Who Killed Health Care? are two great books. Who Killed Health Care? sketches out how the medical industry will have to adapt to greater use of market forces to fulfill its potential. Another resource is the web site State House Call, which focuses on state-level efforts to bring either greater political control or greater freedom to health care.

(First posted at Look True North)

Labels: Health care

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