Archives: 12/2008

School Choice Saves Money and Children

State governments are facing declining tax revenues and increasing budgetary demands. So lawmakers should take note of a state report from Florida released today that concludes Florida is saving millions of dollars with school choice.

School choice is the only policy that means huge returns for state governments, school districts, taxpayers, and children all at the same time.

The Office of Program Policy Analysis & Government Accountability found that taxpayers saved about $39 million, close to 50 cents for ever dollar donated through Florida’s education tax credit program last year. The report concludes much more could be saved if politicians expand the program and give families more choice.

Florida’s education tax credit program allows businesses to take dollar-for-dollar tax credits on money they donate to scholarship organizations that help kids attend private schools. Instead of sending a portion of their tax bill to the state, businesses can choose to support alternative education options for needy children and save taxpayers a bundle as well.

This is one more in a long line of research showing that school choice saves money while savings kids.

Florida needs to expand their program and other states need to catch up with the seven that already have education tax credit programs.

Blowing the Whistle on “Stellar Wind”

Newsweek has a very interesting story on Thomas M. Tamm, the former Justice Department lawyer who was a source for New York Times reporters Eric Lichtblau and James Risen, who broke the warrantless wiretapping story three years ago yesterday.

The dimension of the story most interesting to me is the failure of congressional oversight to perform its role. Uneasy with what his Justice Department colleagues called ‘the program’ and assumed to be illegal, Tamm had contacted a friend of his who worked for the Senate Judiciary Committee. But Sandra Wilkinson “shut down their conversation.”

Among derelictions of duty, this one stands out. It is the job of the legislative branch to oversee the executive. Sandra Wilkinson, her Judiciary Committee colleagues, and her boss (my cursory checking hasn’t revealed who that was) failed to pursue allegations of illegality in the Justice Department. They will live out their lives with the quiet infamy of gutlessness.

Thankfully, we have a watchdog press and a protective First Amendment. Otherwise, ‘the program’ might even now be metastisizing into a greater threat to our liberties. As it is, the rule of law in the United States has taken a hit, the Congress sickeningly ratified the illegal wiretapping program, and Americans have gotten a refresher course on why not to trust the government of the country they love.

Blagojevich’s Real Outrage

I’ve often said, as for instance here, that P. J. O’Rourke is so funny that people forget what an insightful reporter and analyst he is. (In the article linked, I suggested giving young people his books Parliament of Whores and Eat the Rich as “a post-graduate course in political science and economics .”)

Now it looks like I may have to say the same about Joe Queenan, the humor columnist and author of such books as Red Lobster, White Trash, and the Blue Lagoon. In the Washington Post Queenan says that Rod Blagojevich’s attempt to sell the president-elect’s U.S. Senate seat is actually not his most corrupt deal. He makes a strong point:

What’s far more worrisome is Blagojevich’s bizarre confrontation with the Bank of America. The day before he was arrested on charges of massive corruption, Blagojevich visited a group of striking workers at a North Chicago firm called Republic Windows & Doors. After being laid off the week before, the employees had begun a sit-in, demanding benefits they were still owed by their employer, which said it could not meet their demands because the Bank of America had cut off its financing. At this point, Blagojevich informed bank officials that unless they restored the shuttered window-and-door company’s line of credit, the state of Illinois would suspend all further business with Bank of America. A few days later, the bank caved in and ponied up a $1.35 million loan.

The idea that the governor of a state as prosperous and important and sophisticated and upscale as Illinois would make this kind of threat is terrifying. Even more terrifying is that Bank of America saw no alternative but to give in. Yet even more terrifying is that nobody outside Chicago seems to have gotten terribly worked up about the situation, riveted as they are on the governor’s more theatrical transgressions. But peddling a Senate seat or using scare tactics to shake down a newspaper are nowhere near so serious a menace to society as letting the government arbitrarily intervene in financial transactions between banks and creditors. A crooked governor we can all handle. But a governor who capriciously decides which commercial enterprises a bank must finance and which it can ignore is a scary proposition indeed.

Rome wasn’t built in a day. But get the wrong politician in office, and you can burn it in a day.

What the grandstanding Blagojevich reportedly attempted to do in the Republic Windows vs. Bank of America set-to is precisely the sort of thing that happens in China, where the government routinely orders up bank loans to politically connected firms. Whether a failing company actually deserves financing becomes irrelevant to the conversation; the government doesn’t want a company to fail, so it decides that it must not go under, even if it’s run by clowns, stooges, gangsters or in-laws.

Professorial Feeding Frenzy

Just as predicted, more and more ivory-tower sharks are gathering for the taxpayer bloodlet…er…stimulus. But what choice do they have? Even Harvard’s had to cut back:

Even holiday parties for the Faculty of Arts and Sciences have been scaled back.

On Thursday, Harvard deans and administrators will gather in the faculty room in University Hall for one bash instead of two, normally held off-site. No spouses or other guests. Only wine, beer, soda; no hard liquor.

But the festivities will not entirely lose their glow. Harvard being Harvard, the faculty room is plush - adorned with crystal chandeliers, Oriental carpets, and marble busts and oil paintings of Harvard’s presidents and famous alumni. The mint-green walls are accented with Greek columns. Revelers will feast on puff pastries, canapes, and other hors d’oeuvres as a student plays seasonal music from the grand piano in the corner.

Pirates and Sharks

Remember the summer of the shark? That was 2001, when the media, feeding on a few high profile incidents, gave Americans the impression that they faced an outbreak of shark attacks, when in fact shark attacks were down. Something similar may be happening today with piracy.

If you’re reading the news these days, you are likely under the impression that an explosion of piracy threatens global shipping. But according to statistics kept by the International Maritime Bureau (IMB) piracy is not occurring at an unusual rate this year. (They define piracy as using force to board or attempt to board a ship to commit a crime.) Piracy is up slightly in the last two years but down since 2005. This year’s 265 attacks (a projection based on three quarters of data) are just 60% of the level recorded in 2003, when there were 445 attacks. On the other hand, as the chart below shows, the 2000s have seen considerably more piracy than the 1990s. And hijacking has increased substantially this year, up from 15 incidents in 2007 to 50 and counting this year.

Here’s a chart showing worldwide incidents of piracy since 1995. The data is from the IMB. The number for 2008 is projected from three quarters of data, so it may be a little off.

In recent years, piracy has more than tripled in the Gulf of Aden and off Somalia – from 21 attacks in 2003 to 63 through three quarters this year. But that growth is not enough to offset the downturn elsewhere. Bangladesh, Indonesia and the Malacca Straits together saw 207 attacks in 2003 but only 65 last year. The total in those waters this year will be even lower. It’s possible that the nature and volume of shipments in the Gulf of Aden along with the prevalence of hijacking there make recent piracy particularly costly. But the IMB’s data, at least, provides little evidence for this claim.

Although the cause of the spike in piracy near Somalia is unclear, it coincides with the fall of the Islamic Courts Union, which was chased from power by an Ethiopian invasion that the United States backed. (If you think it’s obvious that lawlessness in Somalia caused the outbreak of piracy, then explain why decades of anarchy never before produced piracy of this volume.) Most analysts attribute the drop in attacks in Asia to better cooperative efforts to combat piracy and improved economic conditions.

The big reason piracy has increased in this decade is probably because maritime trade itself grew - from 4 billion tons of cargo in 1990 to 7.4 billion tons in 2006, according to the International Maritime Organization. There are more targets. But piracy’s overall effect on trade remains small. One estimate of piracy’s annual cost is $16 billion a year. Some say even that estimate is far too high. Maritime commerce back in 2005 had a total value of $7.8 trillion. Note that even the hijacking of an oil tanker in the Gulf of Aden has not much slowed tanker traffic there.

While we are here, it is also worth addressing the alleged piracy-terrorism nexus. In short, there is no evidence that it exists. (Terrorists hijacking a fishing vessel to get to Mumbai does not constitute a nexus.) What about the fact that Somalia, source of so much piracy, is supposed to be the next big al Qaeda base? The truth is, Somalia never had a significant al Qaeda presence, no more than a few guys.

Because the victims of piracy in the Gulf of Aden are foreign-owned ships and because the effect on U.S. consumers is tiny, this is a problem best left to nations that suffer more direct costs or shippers themselves. Americans should encourage multilateral solutions, but should not confuse the problem with one that has great consequences for their welfare.

Arne Duncan

I don’t know much about Arne Duncan, President-elect Obama’s choice to be Secretary of Education. But I do note this: In seven years running the Chicago public schools, this longtime friend of Obama was apparently not able to produce a single public school that Obama considered good enough for his own children.

A Cause to Be Proud Of

In the December edition of CatoAudio, I talk about some great moments in the history of liberty and libertarianism, from the ancient Hebrews to the three remarkable women of 1943 and the people fighting for freedom right now against tremendous odds. And I reply to the New York Times’s criticisms of libertarians who “claim to love freedom [but] have so often had a soft spot for those who would deny it to others.”

If you’re a CatoAudio subscriber, don’t be confused by the title “David Boaz on the coming century of liberty,” which was actually the title of an earlier speech (video or transcript). This one might better be titled “Great Moments in the History of Liberty” or “A Cause to Be Proud Of.”

And if you’re not a CatoAudio subscriber, then you’re missing out! Go here to subscribe. You can either receive a monthly CD in the mail or sign up for an MP3 subscription.