Retaliation and Intimidation within the VA

Mismanagement within the Department of Veterans Affairs (VA) is chronic. The agency mismanages its projects and its patients. Last year’s scandal at the Phoenix VA centered on allegations that veterans waited months for treatment while never being added to the official waiting lists. The VA Secretary resigned and the agency focused on changing course. New reports suggest that agency reforms still have a long way to go.

A congresswoman at a recent congressional hearing described the VA as having a “culture of retaliation and intimidation.” Employees who raise concerns about agency missteps are punished. The U.S. Office of Special Counsel (OSC), which manages federal employee whistleblower complaints, reported that it receives twice as complaints from VA employees than from Pentagon employees, even though the Pentagon has double the staff. Forty percent of OSC claims in 2015 have come from VA employees, compared to 20 percent in 2009, 2010, and 2011.

During the hearing, a VA surgeon testified about the retaliation he faced following his attempts to highlight a coworker’s timecard fraud. From July 2014 until March 2015, his supervisors revoked his operating privileges, criticized him in front of other employees, and relocated his office to a dirty closet before demoting him from Chief of Staff.

Another physician was suspended from his job shortly after alerting supervisors to mishandled lab specimens. A week’s worth of samples were lost. Several months later, he reported another instance of specimen mishandling and his office was searched. He became a target of immense criticism.

Do Baltimore Schools Need More Money?

Is the problem with Baltimore’s district schools a lack of funds?

The Daily Show’s Jon Stewart argued as much during a recent interview with ABC’s George Stephanopoulos:

“If we are spending a trillion dollars to rebuild Afghanistan’s schools, we can’t, you know, put a little taste Baltimore’s way. It’s crazy.”

However, under even cursory scrutiny, Stewart’s claim falls apart like a Lego Super Star Destroyer dropped from ten feet. As economist Alex Tabarrok explained:

Let’s forget the off-the-cuff comparison to Afghanistan, however, and focus on a more relevant comparison. Is it true, as Stewart suggests, that Baltimore schools are underfunded relative to other American schools? The National Center for Education Statistics reports the following data on Baltimore City Public Schools and Fairfax County Public Schools, the latter considered among the best school districts in the entire country:

school data2

Baltimore schools spend 27% more than Fairfax County schools per student and a majority of the money comes not from the city but from the state and federal government. Thus, when it comes to education spending, Baltimore has not been ignored but is a recipient of significant federal and state aid.

Roger Milliken’s Company Joins the Global Economy

Roger Milliken, head of the South Carolina textile firm Milliken & Co. for more than 50 years, was one of the most important benefactors of modern conservatism. He was active in the Goldwater campaign, and was a founder and funder of National Review and the Heritage Foundation. He dabbled in libertarianism, too. He was a board member of the Foundation for Economic Education and supported the legendary anarchist-libertarian speaker Robert LeFevre, sending his executives to LeFevre’s classes.

But he parted company with his free-market friends on one issue: free trade. Starting in the 1980s, when Americans started buying a lot of textile imports, he hated it. As the Wall Street Journal reports today,

Milliken & Co., one of the largest U.S. textile makers, has been on the front lines of nearly every recent battle to defeat free-trade legislation. It has financed activists, backed like-minded lawmakers and helped build a coalition of right and left-wing opponents of free trade….

“Roger Milliken was likely the largest single investor in the anti-trade movement for many years—as though no amount of money was too much,” said former Clinton administration U.S. Trade Representative Charlene Barshefsky, who battled with him and his allies….

Mr. Milliken, a Republican, invited anti-free-trade activists of all stripes to dinners on Capitol Hill. The coalition was secretive about their meetings, dubbing themselves the No-Name Coalition.

Several people who attended the dinners, which continued through the mid-2000s, recall how International Ladies’ Garment Workers Union lobbyist Evelyn Dubrow, a firebrand four years younger than the elderly Mr. Milliken, would greet the textile boss, who fought to keep unions out of his factories, with a kiss on the cheek.

“He had this uncanny convening power,” says Lori Wallach, an anti-free-trade activist who works for Public Citizen, a group that lobbies on consumer issues. “He could assemble people who would otherwise turn into salt if they were in the same room.”…

“He was just about the only genuinely big money that was active in funding trade-policy critics,” says Alan Tonelson, a former senior researcher at the educational arm of the U.S. Business and Industry Council, a group that opposed trade pacts.

But the world has changed, and so has Milliken & Co. Roger Milliken died in 2010, at age 95 still the chairman of the company his grandfather founded. His chosen successor, Joseph Salley, wants Milliken to be part of the global economy. He has ended the company’s support for protectionism and slashed its lobbying budget. And as the Journal reports, Milliken’s executives are urging Congress to support fast-track authority for President Obama.

The OECD’s “Perspective” on Swedish Education

The OECD has just released a report offering “its perspective” on Sweden’s academic decline. Its perspective is too narrow. In launching the new report, OECD education head Andres Schleicher declared that “It was in the early 2000s that the Swedish school system somehow seems to have lost its soul.” The OECD administers the international PISA test, which began in the year 2000.

Certainly Sweden’s academic performance has fallen since the early 2000s, but its decline was substantially faster in the preceding decade. PISA cannot shed light on this, but TIMSS—an alternative international test—can, having been introduced several years earlier. On the 8th grade mathematics portion of TIMSS, Sweden’s rate of decline between 1995 and 2003 was over five points per year. Between 2003 and 2011 it was less than two points per year. Still regrettable, but less grievously so.

David Simon on Baltimore’s Policing Nightmare

If you happened to miss it last week, go catch Bill Keller’s extraordinary Marshall Project interview with David Simon, former Baltimore Sun reporter, creator of the crime drama “The Wire,” and longtime Drug War critic. A few highlights:

I guess there’s an awful lot to understand and I’m not sure I understand all of it. The part that seems systemic and connected is that the drug war — which Baltimore waged as aggressively as any American city — was transforming in terms of police/community relations, in terms of trust, particularly between the black community and the police department. Probable cause was destroyed by the drug war. …

Probable cause from a Baltimore police officer has always been a tenuous thing. It’s a tenuous thing anywhere, but in Baltimore, in these high crime, heavily policed areas, it was even worse. When I came on, there were jokes about, “You know what probable cause is on Edmondson Avenue? You roll by in your radio car and the guy looks at you for two seconds too long.” Probable cause was whatever you thought you could safely lie about when you got into district court.

Then at some point when cocaine hit and the city lost control of a lot of corners and the violence was ratcheted up, there was a real panic on the part of the government. And they basically decided that even that loose idea of what the Fourth Amendment was supposed to mean on a street level, even that was too much. Now all bets were off. Now you didn’t even need probable cause. The city council actually passed an ordinance that declared a certain amount of real estate to be drug-free zones. They literally declared maybe a quarter to a third of inner city Baltimore off-limits to its residents, and said that if you were loitering in those areas you were subject to arrest and search. Think about that for a moment: It was a permission for the police to become truly random and arbitrary and to clear streets any way they damn well wanted.

Yet Another Greek Secret: The Case of Phantom Assets

When banks are in distress, it is important to assess how easily the bank’s capital cushion can absorb potential losses from troubled assets. To do this, I performed an analysis using Texas Ratios for Greece’s four largest banks, which control 88% of total assets in the banking system.

We use a little known, but very useful formula to determine the health of the Big Four. It is called the Texas Ratio. It was used during the U.S. Savings and Loan Crisis, which was centered in Texas. The Texas Ratio is the book value of all non-performing assets divided by equity capital plus loan loss reserves. Only tangible equity capital is included in the denominator. Intangible capital — like goodwill — is excluded.

Despite the already worry-some numbers, the actual situation is far worse than even I had initially deduced. A deeper analysis of the numbers reveals that Greece’s largest banks include deferred tax assets as part of total equity in their financial statements. Deferred tax assets are created when banks are allowed to declare their losses at a later time, thereby reducing tax liabilities. This is problematic because these deferred tax assets are really just “phantom assets” in the sense that these credits cannot be used (read: worthless) if the Greek banks continue to operate at a pretax loss.

Breastmilk, Formula, and WIC

The federal government runs more than 2,300 subsidy programs. One of the problems created by the armada of hand-outs is that many programs work at cross-purposes.

Government information programs urge women to breastfeed. This website says, “the cells, hormones, and antibodies in breastmilk protect babies from illness. This protection is unique and changes to meet your baby’s needs.” Breastfeeding, the government says, may protect babies against asthma, leukemia, obesity, ear infections, eczema, diarrhea, vomiting, lower respiratory infections, necrotizing enterocolitis, sudden infant death syndrome, and diabetes. 

The alternative to breastfeeding is baby formula. Some moms need to use formula, but you would think given the superiority of breastmilk that the government would not want to encourage formula. But that is exactly what the government does with the Women, Infants, and Children (WIC) program. According to the Wall Street Journal, the “largest single expense” in the $6 billion program is subsidies for formula. If you subsidize something, you get more of it. And, presumably, more formula means less breastmilk.

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