Archives: 02/2010

Thoughts on the New Brookings School Choice Report

A new Brookings Institution report suggests ways for the federal government to promote school choice. On the eve of its release, I voiced some practical and constitutional objections to the idea. Now that the report is out, contributing author Jay Greene asks if I’m still apprehensive. The short answer is yes.

Brookings assembled an impressive group of scholars to write the report, and their education policy recommendations deserve serious consideration. Their goal of ensuring more and better access to more and better educational choices is one that I share, and I hope the following comments will help advance that goal.

Good policy, like good science, is grounded in concrete evidence. Only where evidence is lacking is it wise to fall back on theory. The Brookings report relies on theory in a couple of important areas where extensive evidence is available to show us the way. In particular, the authors acknowledge that U.S. experience with alternative school systems is minimal, but (with a single exception — see below) they do not discuss the vast wealth of evidence from other nations that have more extensive and longer-running experience with school choice systems.                   

Some have argued that we can learn little about school governance from other nations because cultural and economic factors affect educational outcomes too greatly. This criticism does not apply to within-country comparisons of alternative school systems — and virtually all of the literature comparing alternative school systems is within-country. A comparison of government-run, government-funded private, and parent-funded private schools within India, for instance, is not muddied by cultural or economic differences between India and the United States.

What’s more, if we see the same pattern of inter-sectoral results manifested within many different countries, we can be even more confident that the observed differences are truly systemic than if we had inter-sectoral results for only a single nation. A thorough review of the worldwide within-country comparative school governance research is thus essential to optimal education policy design.

It’s also worth noting that openness to non-U.S. research is the norm in engineering and in other scientific fields. If an Indian computer programmer develops an improved sorting algorithm, his American counterparts don’t discount it for cultural reasons. Nor do U.S. civil engineers disregard what can be learned from French bridge projects. Nor do physicians ignore the results of high quality genetic or drug research performed in Iceland or England. As long as the methodologies employed control for cultural and other mitigating factors that might affect the results, American scientists and engineers are not, as a rule, parochial. Education seems the sole exception.

The one bit of foreign school choice evidence discussed in the new Brookings report is a paper by Hsieh and Urquiola reporting results from Chile’s highly regulated voucher-like system. More than a dozen studies of Chile’s voucher system have been conducted, the majority finding that private voucher schools significantly outperform public schools after suitable controls, or that the competition engendered by the program has improved overall academic achievement, attainment, or ultimate earnings of graduates.

Seeming to deviate from this pattern, Hsieh and Urquiola found that the regions in which private school enrollment grew most quickly had overall achievement (of public and private students) that was no better or was even worse than in regions where it grew more slowly. Hsieh and Urquiola concluded from this that increased competition did not improve achievement. But their evidence also supports a quite different conclusion: that regions with bad and worsening public schools drove families more quickly into the private sector.

Hsieh and Urquiola looked at the first 16 years of the program, during which time public schools still enrolled the majority of students (though that share was falling continuously and has since dropped below 50 percent). Overall academic performance was thus still chiefly a function of public school performance, and public schools are protected from private sector competition by receiving extra municipal funding that is not tied to enrollment and to which the private voucher-receiving schools do not have access. So it was never reasonable to expect, based on the design of the Chilean system, that public schools would show significant gains from competitive forces, because those forces never really touched them.

Given the evidence just presented and the fact that the bulk of studies of the Chilean program contradict Hsieh and Urquiola’s conclusion, it seems likely that they did indeed misinterpret their findings.

More importantly, Hsieh and Urquiola’s conclusion is not only an aberration within the Chilean research, it is also an aberration within the worldwide literature on the relative merits of market and monopoly provision of education. When I reviewed this research for the Journal of School Choice last year, I found 65 studies reporting 156 separate statistical comparisons of public and private school achievement. When truly market-like programs are compared to monopolistic ones such as U.S. public schooling, the statistically significant results favoring markets outweigh the results favoring monopolies by a margin of 15 to 1 (and they also handily outnumber the insignificant findings).

By offering only the uncharacteristic Hsieh and Urquiola study out of the vast literature just described, the Brookings paper is apt to give readers a mistakenly negative perception of the worldwide evidence. This is particularly true because the authors are avowed supporters of school choice.

In the absence of the international evidence, the Brookings authors are forced to resort to theory on several crucial policy issues, such as the need for and merits of state regulation of the marketplace (e.g., with respect to virtual schools) and state information services to supply a perceived gap in information available to parents. Consulting that evidence leads to the conclusion that government regulatory efforts to improve the quality of educational services are ineffective at best and counterproductive at worst (see the paper linked above for the evidence supporting that pattern, and see James Tooley’s The Beautiful Tree for an explanation of its cause). It shows, furthermore, that even illiterate parents in the poorest slums of the third world are not only capable of making wise educational choices for their children in the absence of government advice, but that they are already doing so in massive numbers.

In addition to the above concern, the practical and constitutional issues I raised in advance of the Brookings report’s publication still apply now that I have read it in full.

That said, this is one of the most benign sorts of disagreements scholars can have, rooted as it is on our having developed our policy recommendations from different data sets. I look forward to hearing how the authors of the Brookings report think the worldwide evidence bears on school choice policy.

Average vs. Marginal Effects of Health Insurance

I have to thank Ezra Klein.  I have for some time been trying, without success, to spark a debate about whether expanding health insurance coverage would actually save any lives.  Even my bet with Karen Davenport seemed to go nowhere.  But when Klein accused Sen. Joe Lieberman (I-CT) of being “willing to cause the deaths of hundreds of thousands of people” because Lieberman was jeopardizing passage of legislation that would expand health insurance to 30 million people, Klein made a debate possible.

Following on my first response to Klein that the evidence supporting his claim is remarkably thin, others have joined the discussion.  Matt Yglesias of the Center for American Progress rose to Klein’s defense.  Megan McArdle (in The Atlantic magazine and her blog) and Tyler Cowen (at Marginal Revolution) both argue that we don’t really know if Klein’s claim is true.

Today, Yglesias poses the following question on his Twitter page:

Do rightwingers really believe that US health insurance has no mortality-curbing impact?

I see two problems.  First, there are no right-wingers in this debate.  McArdle, Cowen, and I all support gay marriage, for example.

Second, Yglesias sets up a straw man.  He asks whether health insurance on average has a positive impact on mortality, when the debate is actually over the effect of health insurance at the margin.  In other words, would covering the uninsured save lives?

I don’t know anyone who thinks health insurance has zero effect on mortality overall.  Yet it is entirely possible for the average effect to be positive and the marginal effect to be zero. One reason may be that the uninsured do benefit from the human and physical capital that health insurance makes possible.  It may also be the case that when the uninsured do obtain health insurance, the additional medical care they receive is more likely to harm them than to help them.  The researchers behind the RAND Health Insurance Experiment make essentially the same point.

If the marginal effect of health insurance on health is zero, it raises other interesting questions.  Would it also have zero effect on health outcomes if we were to reduce the number of people with health insurance?  What is the size of the margin over which health insurance has zero impact?  (Robin Hanson suggests it may be very, very large.)

Klein recently declined an invitation to debate these issues at Cato.  Too bad.  This is worth pursuing.

Congress Goes After Citizens United

Snowstorm notwithstanding, Sen. Charles Schumer and Rep. Chris Van Hollen introduced legislation in response to the Citizens United decision. A summary of their effort can be found here.

Some parts of the proposal are simply pandering to anti-foreign bias (corporations with shareholding by foreigners are prohibited from funding speech) and anger about bailouts (firms receiving TARP money are banned from funding speech). Government contractors are also prohibited from independent spending to support speech. We shall see whether these prohibitions hold up in court. The censorship of government contractors and TARP recipients will likely prove to be an unconstitutional condition upon receiving government benefits.

Despite Citizens United, Congress will try to suppress speech by other organizations.  Schumer-Van Hollen relies on aggressive disclosure requirements to deter speech they do not like. CEOs of corporations who fund ads will be required to say they “approve of the message” on camera at the end of the ad.

Citizens United upheld disclosure requirements, but it also vindicated freedom of speech. The two commitments may prove incompatible if Schumer-Van Hollen is enacted. This law uses aggressive mandated disclosure to discourage speech. We know that members of Congress believe this tactic could work. Sen. John McCain said during the debate over McCain-Feingold that forcing disclosure of who funded an ad will mean fewer such ads will appear. In other words: more disclosure, less speech. Just after Citizens United, law professor Laurence Tribe called for mandating aggressive disclosure requirements in order to “cut down to size” the impact of disfavored speech.

During the next few months the critics of Citizens United may well show beyond all doubt that the purpose of its disclosure requirements are to silence political speech. In evaluating the constitutionality of Shumer-Van Hollen, the Court could hardly overlook such professions of the purpose behind its disclosure requirements.

One other part of Schumer-Van Hollen is probably unconstitutional. They would require any broadcaster that runs ads funded by corporations to sell cheap airtime to candidates and parties. Several similar attempts to equalize speech through subsidies have recently been struck down by the Court. This effort would share a similar fate.

All in all, Schumer-Van Hollen is a predictable effort to deter speech by disfavored groups. Congress is reduced to attacking foreigners and bailout recipients while hoping that mandated disclosure will discourage speech.  The proposal law suggests a comforting conclusion. For most Americans, Citizens United deprived Congress of its broadest and most effective tools of censoring political speech.

If the So-Called Stimulus Was an Unsung Hero, I’d Hate to Meet a Singing Enemy

The White House recently released the Economic Report of the President. In a post at the White House blog, Christina Romer brags that the stimulus legislation was a big success.

This Act is the great unsung hero of the past year.  It has provided a tax cut to 95 percent of America’s working families and thousands of small businesses.  It has meant the difference between hanging on and destitution for millions of unemployed workers who had exhausted their conventional unemployment insurance benefits.  It has kept hundreds of thousands of teachers, police, and firefighters employed by helping to fill the yawning hole in state and local budgets.  And, it has made crucial long-run investments in our country’s infrastructure and jump-started the transition to the clean energy economy.  All told, the Recovery Act has saved or created some 1½ to 2 million jobs so far, and is on track to have raised employment relative to what it otherwise would have been by 3.5 million by the end of this year.

Let’s set aside some of the disingenuous components of her post, such as categorizing income redistribution as tax relief, and focus on her claim that the legislation created at least 1.5 million new jobs when total employment has dropped by 3 million. Romer is not bad at math. Instead, she is saying that the economy would have lost 4.5 million jobs if it were not for the $787 billion increase in government spending. This what-might-have-been analysis is completely legitimate, assuming that there is good theory and evidence to back the assertion. Unfortunately (at least for the White House’s credibility), Ms. Romer and another colleague last year prepared a supposedly rigorous what-might-have-been report, where they estimated that the so-called stimulus would keep the unemployment rate at 8 percent and that failure to increase the burden of government spending would drive the unemployment rate to 9 percent. Yet as this chart from their paper indicates, when we add in the data for what actually has happened, in turns out that bigger government is not only theoretically misguided, but it also doesn’t work in the real world.

Stimulus Hypocrisy and the Tea Partiers

The Washington Times recently used the Freedom of Information Act to obtain letters sent to the U.S. Department of Agriculture by numerous Republican lawmakers seeking stimulus money for their constituents. All of these Republicans had publicly criticized the stimulus and voted against it.

Georgia Rep. John Linder wrote on his website in October that recent unemployment figures “only reinforce the fact that the $787 billion ‘stimulus’ signed into law eight months ago has done nothing for job growth in this country.” But just two weeks earlier the congressman had sent a letter to Agriculture Secretary Tom Vilsack on behalf of a foundation in his district seeking stimulus funds in which he claimed “the employment opportunities created by this [foundation’s] program would be quickly utilized.”

Remember South Carolina Rep. Joe Wilson who infamously shouted “You lie!” during President Obama’s speech to Congress in September? Here’s what he had to say in a letter to Secretary Vilsack on behalf of a foundation in his district:

“We know their endeavor will provide jobs and investment in one of the poorer sections of the Congressional District.”

According to his spokeswoman, Rep. Wilson opposed the stimulus as a “misguided spending bill,” but wanted to make sure his constituents “receive their share of the pie.” That’s pretty much the same excuse the rest of the GOP lawmakers gave: the stimulus is bad but my constituents deserve their “fair share.”

So much for principles.

Speaking of principles, it’s stories like this that should give the burgeoning Tea Party movement pause before getting too close to GOP politicians. I spoke to a newly formed group of a hundred or so tea partiers in southern Indiana back in December. The vast majority was concerned about Washington’s spending addiction and Beltway encroachment on their lives. In the two hours I fielded questions, only one brought up illegal immigration and nobody brought up Obama’s birth certificate. They weren’t worried about Muslims and gays – they were worried about what the mounting federal debt meant for their children and grandchildren’s future.

Therefore it was disconcerting to read that the organizers of this past weekend’s Tea Party Convention in Nashville brought in Tom Tancredo and Sarah Palin to speak. Tancredo’s agenda was typically nasty and counterproductive, while Palin’s combined her formulated hockey mom shtick with a sophomoric jingoism that should have appalled devotees of limited government. Yet, according to the video of her speech, the crowd loved it.

Instead of spending $100,000 on Palin, I suggest Tea Party organizers bring in my colleague John Samples to speak at the next convention. (John’s worth $100,000 but can be had for considerably less.) John recently wrote a column, entitled “Tea Partiers Shouldn’t Date the GOP,” that every budding tea partier should read.

Here’s an excerpt:

The quality that gives the Tea Party movement its legitimacy is that it is so fundamentally illegitimate: outside the establishment, bereft of representation on K Street, and without an identifiable face to speak for it on Meet the Press. This is a movement that sprang deep from within the viscera of America, not from some political poll or focus group.

It is not Republican; it is not even conservative. It has no interest in debating the merits of No Child Left Behind, abstinence-only sex education or George W. Bush’s rationale for going to Iraq. Replacing a “spend and borrow” Democrat with a “spend and borrow” Republican is not the goal of the Tea Party movement.

This movement is simply saying: “We are fine without you, Washington. Now for the love of God, go attend a reception somewhere, and stop making health care and entrepreneurship more expensive than they already are.”

I hope John’s right because if the movement allows itself to become entangled with the same party that publicly eschews big government stimulus while groveling behind the scenes for a piece of it, the [Tea] party will be over.

The Federal Government Is Bribing States to Create More Welfare Dependency?!?

If you want to get depressed or angry, the New York Times has an article celebrating the effort by politicians at all levels of government to lure more people into the food stamp program. New York City is running ads in foreign languagues asking people to stick their snouts in the public trough. The City is even signing up prisoners when they get out of jail. The state of New York, meanwhile, actually set up quotas for enrolling new recipients. And on the federal level, there apparently is a program that gives states “bonuses” for putting more people on the dole. No wonder one out of every eight Americans is receiving food stamps. By the way, this is not just the fault of Democrats. The ranking Republican on the Agriculture Committee is a big defender of the program, in part because of the sordid pact among urban and rural politicians to support each other’s handouts. And President George W. Bush’s food stamp administrator actually had the gall to assert “food stamps is not welfare.” No wonder the burden of federal spending skyrocketed during the reign of so-called compassionate conservatism. The correct policy, of course, is to get the federal government out of the welfare business. If Mayor Bloomberg thinks it is a “civic duty” to expand food stamps, he should see whether New York City voters agree with him - and want to foot the bill.

A decade ago, New York City officials were so reluctant to give out food stamps, they made people register one day and return the next just to get an application. The welfare commissioner said the program caused dependency and the poor were “better off” without it. Now the city urges the needy to seek aid (in languages from Albanian to Yiddish). Neighborhood groups recruit clients at churches and grocery stores, with materials that all but proclaim a civic duty to apply — to “help New York farmers, grocers, and businesses.” There is even a program on Rikers Island to enroll inmates leaving the jail. “Applying for food stamps is easier than ever,” city posters say. …These changes, combined with soaring unemployment, have pushed enrollment to record highs, with one in eight Americans now getting aid. “I’ve seen a remarkable shift,” said Senator Richard G. Lugar, an Indiana Republican and prominent food stamp supporter. “People now see that it’s necessary to have a strong food stamp program.” …The program has commercial allies, in farmers and grocery stores, and it got an unexpected boost from President George W. Bush, whose food stamp administrator, Eric Bost, proved an ardent supporter. “I assure you, food stamps is not welfare,” Mr. Bost said in a recent interview. Still, some critics see it as welfare in disguise and advocate more restraints. …The federal government now gives bonuses to states that enroll the most eligible people. …In 2008, the program got an upbeat new name: the Supplemental Nutrition Assistance Program — SNAP. …Since Mayor Michael R. Bloomberg took office eight years ago, the rolls have doubled, to 1.6 million people… Albany made a parallel push to enroll the working poor, setting an explicit goal for caseload growth. “This is all federal money — it drives dollars to local economies,” said Russell Sykes, a senior program official. But Mr. Turner, now a consultant in Milwaukee, warns that the aid encourages the poor to work less and therefore remain in need. “It’s going to be very difficult with large swaths of the lower middle class tasting the fruits of dependency to be weaned from this,” he said.

President Palin?

“Take Sarah Palin seriously,” David Broder writes in the Washington Post. ”In the present mood of the country, Palin is by all odds a threat to the more uptight Republican aspirants such as Mitt Romney and Tim Pawlenty – and potentially, to Obama as well.” Palin’s own Captain Ahab, Andrew Sullivan, wrings his hands that she’s the “leader of the opposition” and a real threat to be president. Time’s Joe Klein goes even further: “Is Sarah Palin the favorite to win the Republican nomination and therefore someone to be taken absolutely seriously? You betcha.”

Yes, well, I’m old enough to remember that Newsweek prepared six covers for the week of the 1968 election (I was very precocious), and one of them proclaimed “President-elect George Wallace.” Wasn’t gonna happen. Nor is this. As for those who compare Palin to Ronald Reagan, yes, there are some similarities. They both lived in the West, they’re both “conservative” in some sense, and they were both dismissed by effete East Coast intellectuals. But I see just a few differences:

  1. Reagan served eight years as governor of a very large state; he didn’t quit after half a term.
  2. Reagan had spent a long time developing a real political philosophy, one that had changed a great deal during his adult life. In his time as president of the actors’ union, 1947-52, he was known as a liberal, anti-communist Democrat. A long life of watching the world, paying taxes, and reading moved him to the libertarian right. Palin couldn’t name any newspapers she reads. Reagan told Rowland Evans in an interview, “I’ve always been a voracious reader – I have read the economic views of von Mises and Hayek, and … Bastiat…. I know about Cobden and Bright in England – and the elimination of the corn laws and so forth, the great burst of economy or prosperity for England that followed.” Reagan thought a lot about what he believed, and his deep understanding of a set of political principles was perhaps his most notable characteristic when he emerged on the political stage.
  3. Reagan was smart and could articulate his views on public policy. One of the standard defenses of Palin is “liberals said Reagan was dumb.” Yes, they did, even after he out-debated Bobby Kennedy in an internationally televised debate just months after he became governor. Democratic mandarin Clark Clifford, who didn’t realize that the bank he chaired was run by actual criminals, famously called Reagan an “amiable dunce.” But now that Reagan’s hand-written radio commentary scripts have been published, no one really makes this claim any more. Read Reagan in His Own Hand, read the commentaries he wrote on yellow pads while being driven from Los Angeles to Santa Barbara, and ask yourself: Could Sarah Palin do that?

Sarah Palin can be a dazzling performer. But she’s still capable of saying that Obama could improve his chances for reelection if he ”played the war card … decided to declare war on Iran.” Her articulation of political ideas remains remarkably thin. The Republican bench may be weak, but I don’t think it’s that weak.