Archives: 02/2010

Were You a Cato Intern?

After 33 years in business, and 33 years of Cato interns, we’re finally getting around to creating an intern alumni newsletter – and an intern reunion this May. So if you were ever an intern for Cato, and you’re not sure Director of Student Programs Joey Coon knows where you are, please let him know. And if you’re still in touch with other fellow interns, please tell them about our plans.

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Topics:

Politicians Are SO Predictable!

The big vote-buy is on!

Today, the Obama administration will release its FY 2011 budget proposal, and while the administration would supposedly freeze discretionary spending in all areas except defense, homeland security, and veteran’s affairs, education is slated to get a huge boost in “investment.” (Politicians love  the term “investment” when discussing education spending, by the way, because it suggests a big payoff to come. That we’ve never actually realized said payoff doesn’t seem to bother them.) The proposal is expected to include a $3 billion increase for No Child Left Behind-authorized programs; $1 billion for some sort of incentive to overhaul NCLB (it’s not clear how the president can offer Congress extra money to act, but I’m sure there are details to come); a $1.35 billion extension of the stimulus-funded Race to the Top fund; and a $17 billion increase in Pell Grant funding.  In other words, education appears slated – as I feared it would – to be the administration’s post-Massachusetts, big vote bribe.

At the same time the budget proposal is coming out, the administration is also starting to release information about it’s plans for NCLB reauthorization. According to the New York Times, the basic idea will be to “change federal financing formulas so that a portion of the money is awarded based on academic progress, rather than by formulas that apportion money to districts according to their numbers of students, especially poor students.”

On the surface, it makes sense to reward high performance rather than just send money to states based on set formulas. But a little deeper digging reveals the pit below.

The performance-based funding will, it seems, be dropped on top of formula-based outlays.  If the performance-based stuff is minuscule relative to the politically more powerful, everyone-gets-a-lot formulas, it would be meaningless – mere reform-y window dressing. But what if it is sizable?

Then we have to be very concerned about how performance would be measured.

As I have repeatedly warned would happen, the administration seems determined to make adopting national standards drafted by the Common Core State Standards Initiative – an effort we are constantly told is state-led, totally voluntary, and definitely not federal – essential for getting at least some performance-based funding. Reports the Times:

[U]nder the administration’s proposals, a new accountability system would divide schools into more categories, offering recognition to those that are succeeding and providing large new amounts of money to help improve or close failing schools.

A new goal…would be for all students to leave high school “college or career ready.” Currently more than 40 states are collaborating, in an effort coordinated by the National Governors Association and encouraged by the administration, to write common standards defining what it means to be a graduate from high school ready for college or a career.

The new standards will also define what students need to learn in earlier grades to advance successfully toward high school graduation.

 So here’s what we’ll get:

If the performance-based monies are small, little incentive to pursue them and hence no major structural change, no academic improvements, but power still pulled closer to Washington. And that’s the good scenario.

If the performance-based monies are big, hello Principal Sam! But again, don’t expect much academic improvement: Just as the large majority of states have set ridiculously low standards, so would the feds. Why? Because the teachers, administrators, and other people employed in public schooling have the greatest motivation and ability to organize for education politicking, and like everyone they’d like as much money with as little outside accountability as possible.  They will ensure that national standards are hollow but the funding substantial, just as they’ve done in state, after state, after state.

At least in education, it’s not all that hard to predict what politicians will do and the failure that will come of it. But all the ”investing in our children” rhetoric can be emotionally powerful, making it hard to rally against the pols before they strike again.

Forget the QDR

There is a lot not to like about the Quadrennial Defense Review, which comes out today (the National Journal posted a leaked copy Friday). Like past QDRs, this one uses vague, trendy ideas about international relations to inflate threats and justify our massive defense budget. As usual, we hear the evidence-free claims that non-state actors are getting more powerful and that the world is getting more complex and unpredictable (“change continues to accelerate”). I believe that states are hanging onto or even gaining power relative to other sorts of social organizations and that the world is no less predictable than it was in 1900 or 1950. The QDR also says that climate change is a national security problem. That’s a popular line, which as near as I can tell is a marketing gimmick. Then there the usual tripe about how great our alliances are, how strategic every country with a Marine in it is, how terrific interagency cooperation is, and so forth.

The good news is that it doesn’t really matter. Newspapers confuse the QDR with law, but it is closer to PR. It’s like a particularly important speech. It sells what Secretary of Defense is selling and justifies what the Department of Defense does. Because it comes in part from agencies it is supposed to guide, it rationalizes rather than leads. Because it is largely a consensus document, it says only what half of the Pentagon can agree on—various strains of mush. Can anyone explain what past QDR’s have accomplished? I think nothing. Sure, there are interesting tidbits about forces structure plans, but these are in the budget documents too. At best it causes DoD to justify itself, giving us analysts something to argue about.

The administration’s proposed defense budget, also being released today, matters much more to policy. It reveals more about the nation’s defense strategy than the vacuous documents that purport to do so.

Policy types love strategy documents because they are mostly technocratic idealists. They want government polices to be made by rational processes that reveal national interests, which are then laid out in plans like the QDR. They want policy to be like science. But democratic government is the push and pull of competing ideologies and interests. Public plans or strategies are part of that process. Congress should thank DoD for these mind-numbing 120 pages, throw them away, and focus on the budget.

Do Democratic Presidents Create More Jobs?

Politifact.com looked into a remark from Rep. Carolyn Maloney, D-N.Y., that “Democrats have been considerably more effective at creating private-sector jobs.”

The statement was rated true, as a purely statistical matter.  Yet the poltifact researcher did a good job questioning the significance of his own figures.  He noted, correctly, that the president usually “deserves less credit for the good times – and less blame for the bad times.”  And he added that job figures can be driven by outside factors such as oil price shocks, demographic changes or soldiers coming home after World War Two.  He wryly noted “how surprised we are that Eisenhower, who presided over the ‘happy’ 1950s, managed an anemic half-percent job growth per year, while Jimmy “Malaise” Carter finished second with 3.45 percent annual job growth.”   Anyone who remembers the runaway inflation of the Carter era will realize that annual rates of job growth are not enough to describe the overall economic situation.

The author also quoted me making the point that “timing can be hugely important.”   It is so important, in fact, that we may need to add another dimension to politifact’s true-false meter to deal with political comments that are simply meaningless.

For the record, what follows is the full text of my email on this topic:

The error involved with assigning rates of job growth to Presidential terms is that six recent Presidents took office within a few months of the start of a recession: Obama (recession began December 2007), H.W. Bush (July 1990), G.W. Bush (Mar 2001), Reagan (July 1981), Nixon (Dec. 1969) and Ike (July 1953).   As it happens, four of the five were Republicans.

One might argue that recessions launched near the end of the previous administration helped get these men elected. But these recessions were clearly left over from events that began previous years.  It didn’t help that the first Pres. Bush passed a tax increase three months after the 1990 recession began, but the start of that recession is more plausibly blamed on the earlier spike in oil prices when Iraq invaded Kuwait.

Since employment is a lagging indicator (one of the last things to improve), that means average job growth among Presidents who took office near the start of recessions is bound to look bad in comparison with Presidents who took office after an expansion was well underway.  Bill Clinton took office in 1993, long after recession ended in March 1991.   The same was true of Truman, LBJ and Carter.   JFK took office a month before the 1960 recession ended.

Two-term Presidents also have more time to show good numbers, but only if they’re lucky enough to get out of office just before the next recession starts.  Clinton squeaked by (despite falling stock prices and industrial production 2000), but Nixon, Eisenhower, Carter and G.W. Bush did not.

Since Bush 2nd began and ended office in recession, averages over 8 years outweigh 4 reasonably good years.  This unprecedented bad timing is exaggerated by Paul Krugman’s comparison of “decades” [and President Obama’s recent reference to “the lost decade” of 1999-2009] which relies on starting and ending each decade in boomy 1959 rather than slumping 1960, ditto 1969 rather than 1970, 1979 rather than 1980, 1989 rather than 1990, and 1999 rather than 2000.

In short, statistics about employment growth over Presidential terms are dominated by the timing of the “business cycle” (including Federal Reserve policy), and have no apparent connection to economic policies attributed to the White House (as opposed to Congress).