Archives: 02/2010

UN Climate Official Steps In It, Then Aside

There are numerous possible reasons for UN climate chief Yvo de Boer’s decision to resign—from his inability to cobble together a new climate treaty last December in Copenhagen (where he wept on the podium), to recent revelations of his agency’s mishandling of climate change data.

What the climate science community and the public should focus on now are the ramifications of de Boer’s resignation.  For one thing, it signals that hope is dead for a UN-brokered global treaty that would have any meaningful effect on global temperatures.  It also means that the UN intends to keep its Intergovernmental Panel on Climate Change pretty much intact under the leadership of the scientifically compromised Rajenda Pauchari, who should have resigned along with de Boer.

This development guarantees that the Obama administration will have an unmitigated mess on its hands when signatories to the Framework Convention sit down in Mexico City this November in yet another meeting intended to produce a climate treaty.  The Mexico City meeting convenes six days after U.S. midterm elections, in which American voters are fully expected to rebuke Obama for policies including economy-crippling proposals to combat climate change.

In short, Mexico City is about as likely to produce substantive policy decisions as the TV show ‘The View.’  Backers of radical climate change measures are now paying the price for over two decades of telling the public—in this case literally—that the sky is falling.

The Paucity of Poor Kids in Many Public Schools

There’s a widespread belief that public schools are homogeneous and all inclusive while private schools are bastions of the elite. This was proven to be a myth decades ago by the renowned sociologist James Coleman, and as far as I know, that pattern of findings hasn’t changed in recent years.

Nevertheless, the myth continues. A new Fordham Institute paper provides a partial antidote, pointing out that quite a few public schools enroll virtually no low-income kids, making them bastions of the elite. Where the Fordham paper trips up a bit is in calling these elite public schools “private public schools.” As already noted above, private schools are, on average, better economically integrated than their government counterparts, so this phrase is exactly backwards and, as Sara Mead points out, is quite a slap in the face to the many private schools that do yeoman’s work serving large numbers of low-income students. Still, good to have folks taking note of these data.

Thursday Links

  • A few things you might not know about rail travel: “Automobiles in intercity travel are as energy efficient as Amtrak. Cars are getting more energy efficient, while boosting Amtrak trains to higher speeds will make them less energy efficient.” The list goes on…
  • Quiz Time! Which was the only country in the 27-nation European Union to register economic growth without going through a recession last year? The answer might surprise you.

Mandating Coverage of Pre-Existing Conditions = Price Controls

Kevin Williamson’s article “Priceless Is Worthless” from the December 21 issue of National Review sat on my nightstand for two months.  When I finally read it, I was glad I hadn’t pitched it.  It was like someone had taken Friedrich Hayek’s “The Use of Knowledge in Society” and made it accessible and entertaining:

For the Soviets, there were no real prices, so there was no feedback loop between producers and consumers: If we’d had that model for soft drinks, we’d still be drinking New Coke, and the cola executives in Atlanta would be strutting around in their nifty military uniforms, with epaulets and braid, telling us to drink our New Coke and like it, because they had determined, RATIONALLY, that this is what we want. A good rule of thumb: Fear the man who says he will make things rational by ignoring reality–and ignoring prices is ignoring reality.

Williamson warms my libertarian heart when he exposes laws requiring insurers to cover pre-existing medical conditions as price controls:

You’d never take a bet that you knew you were going to lose, right? Insurance companies won’t do that, either, unless they get paid to do so–specifically, unless they are allowed to charge at least as much for covering Preexisting Condition X as it’s going to cost them to treat Preexisting Condition X. Ignoring the reality of prices–waving the magic wand and saying: “There shall be no price put on preexisting conditions”–does not solve the problem. Health care costs money. The price is right, and you cannot politically engineer your way out of that reality, no matter how many sickly toddlers you parade around on CNN.

Free-market health care reforms would take a great leap forward if all conservatives and libertarians would just start calling such laws what they are: price controls.

“Smart Growth” from a Dumb Agency

The same federal agency that brought us monumental failures like public housing wants to play a bigger role in fostering so-called regional “smart growth.” HUD secretary Shaun Donovan recently traveled to Portland, Oregon to announce the Obama administration’s new Office of Sustainable Housing and Communities.

This new bureaucracy will distribute $140 million in grants for regional “smart growth” planning:

With OSHC’s grant programs, HUD will provide funding to a wide variety of multi-jurisdictional and multi-sector partnerships and consortia, from Metropolitan Planning Organizations and State governments, to non-profit and philanthropic organizations. These grants will be designed to encourage regions to build their capacity to integrate economic development, land use, transportation, and water infrastructure investments, and to integrate workforce development with transit-oriented development. Accordingly, OSHC’s grants will be coordinated closely with the Department of Transportation (DOT) and Environmental Protection Agency (EPA).

Donovan told a Portland State University crowd that “We at HUD are big admirers of what you’re doing here.” However, Randal O’Toole’s dismantling of the Portland planning utopia myth in a Cato Policy Analysis shows that the city is nothing to be emulated. That is unless other cities want less affordable housing, more congestion, higher taxes, and businesses relocating elsewhere.

Donovan then met up with his EPA and DOT colleagues in Seattle at smart growth conference. HUD isn’t the only one opening up the taxpayer’s wallet:

And the Department of Transportation is proposing $527 million to promote “livable communities” through grants to states and cities. Transportation secretary Ray LaHood says those grants, too, must meet the goals of his partner agencies.

LaHood: “It supports any new initiatives we develop on our own like expanding transit in low–income neighborhoods, or what our friends at HUD and EPA are working on in collaboration.”

Local coalitions are already forming to seek those federal dollars.

Let the rent-seeking begin.

The merits of Portland’s urban planning can be debated all day. But it stands federalism on its head when the federal government takes a particular city’s policies and then tries to shove it down the throats of the rest of the country. Based on what I know of Portland’s planning, I certainly wouldn’t want it where I live. Other cities, like Houston, have reached the same conclusion. But, I guess if Shaun Donovan likes it, then damnit, we’re all going to like it.

When they Give You “Anti-Lemons”…

On Tuesday, I criticized a new economic modeling paper (“Anti-Lemons”) purporting to show that unfettered education markets are bad and that government can fix them with the right regulations.

Andrew Gillen comes to the study’s defense, and I’m delighted that he’s taken the trouble to reflect on it rather than just saying “I like it.” But there are problems with his analysis. First, he faults me for dismissing the “Anti-Lemons” models for being based on false assumptions, citing Paul Krugman:

I am a strong believer in the importance of models, which are to our minds what spear-throwers were to stone age arms: they greatly extend the power and range of our insight. In particular, I have no sympathy for those people who criticize the unrealistic simplifications of model-builders.

Even if we put aside the fact that Paul Krugman is at times less reliable than the Daily Show website, there is an important difference between assumptions that are “unrealistically simplified” and those that are patently wrong. With the former, your model might still huck its intellectual spear somewhere in the general vicinity of the truth, with the latter, you’re just going to put your eye out.

“Anti-Lemons” is in the put-your-eye-out camp. Among other things, it assumes the productivity of all schools is equal. This is both totally false and highly germane – efficiency varies dramatically among schools, and private schools as a whole are consistently more efficient than government schools (as we will see below). Failing to recognize that reality will lead to incorrect results from the model, and this is just one of the false assumptions the paper adopts (see my previous post for others).

Second, Gillen writes that

going by Coulson’s numbers in figure 2 here, we would expect to find a positive impact of markets over government on achievement in slightly less than 2 out of 3 studies (with insignificant findings making up the majority of the others). If the case for free markets over government schools is really so clear cut (and I lean strongly in this direction), than why isn’t this 3 out of 3?

There are many plausible reasons for this result (lack of statistical power, omitted variable bias, other misspecification errors, etc.), but one is particularly worth raising here: government schools in many parts of the world spend several times as much per pupil as their private sector counterparts. This is true in most developing countries, from which a great deal of the inter-sectoral research hails. And when I looked at statewide data from Arizona in 2006 I found that government schools spend roughly 50 percent more than private schools. While it’s true that government school outcomes tend not to improve much as spending rises, the same cannot be said of private schools.

If this is true, you might ask, then wouldn’t the inter-sectoral research on school efficiency be more stark than the research on achievement (that fails to take spending levels into account)? The answer is yes. In fact, if you examine the efficiency bar in the same figure 2 cited by Gillen above, you will see that every single one of the efficiency comparisons between market and monopoly schools is significant and favors the market schools.

So, not only is the “Anti-Lemons” model useless, it is worse than useless: it seems to mislead even intelligent readers into believing that there is some mystery in the literature that needs to be solved by blindly waiving a spear around.

“Anti-Lemons” is neither Camelot, as I said yesterday, nor is it Sparta as Andrew implied. It’s the kid from Christmas Story who nearly puts his eye out by the cavalier application of a potentially powerful tool.