Archives: July, 2010

“Either the Most Honest Politician in the World or the Most Opportunistic”

Paul Waldie at Toronto’s Globe and Mail reports on the case of Mike Reilly, who (unsuccessfully so far) has sought to write off as tax expenses the costs of campaigning for local office in a suburb of Vancouver. Reilly told a tax court that there was nothing idealistic about his quest for government office: he wanted “to earn a good salary and promote his business,” raising the visibility of his development company. Lawyers for the Canada Revenue Agency insisted that Reilly wouldn’t have gone to the trouble of running unless he had cared about at least some public issues, but he disputed that:

“You know, I don’t recall being passionate about any issues other than seizing an opportunity to step in and develop a better profile for myself,” Mr. Reilly replied. “No. It was strictly business for me.”

The tax judge ruled against Reilly based on accounting issues but accepted his general contention that he “was not passionate about any issue except increasing his own profile and earning the salary of mayor,” noting that the candidate “did not listen to the citizens of Delta and did not appear to have much interest in their concerns.” If all politicians had to tell the truth, how many similar confessions might we hear?

DHS FOIbles

The Associated Press is reporting that persons filing requests under the Freedom of Information Act (FOIA) with the Department of Homeland Security during the last year faced scrutiny beyond what the law requires.

Career employees were ordered to provide Secretary Janet Napolitano’s political staff with information about the people who asked for records — such as where they lived, whether they were private citizens or reporters — and about the organizations where they worked.

If a member of Congress sought such documents, employees were told to specify Democrat or Republican.

This, despite President Barack Obama’s statement that federal workers should “act promptly and in a spirit of cooperation” under FOIA, and Attorney General Eric Holder’s assertion: “Unnecessary bureaucratic hurdles have no place in the new era of open government.”

The White House separately reviewed FOIA requests to see documents about spending under the $862 billion stimulus law. Read the whole thing.

Co-opting the Anti-Spenders

Voters who recognize the need to make major cuts to federal spending and think returning Republicans to power will accomplish this feat could be in for a big disappointment. Recent comments to the Washington Post made by former Senate majority leader Trent Lott (R-MS) make it clear that anti-spending candidates elected in November will be fighting against their own party – not just the Democrats.

From the article:

Former Senate majority leader Trent Lott (R-Miss.), now a D.C. lobbyist, warned that a robust bloc of rabble-rousers spells further Senate dysfunction. “We don’t need a lot of Jim DeMint disciples,” Lott said in an interview. “As soon as they get here, we need to co-opt them.”

Lott actually provided one of the more memorable moments in my career as a Senate staffer. The scene took place in the office of Sen. Jeff Sessions (R-AL) at a regular meeting of “conservative” Republican senators to discuss politics and policy. The setting was several months before the 2006 fall elections in which voters sent the Republican majority packing.

Sen. Tom Coburn (R-OK), who I was working for at the time, was pleading with his colleagues to make a last ditch effort to cut spending. Coburn argued, correctly, that voters were fed up with Republican profligacy. In the midst of the discussion, Trent Lott entered. Strolling about the office while chomping on snacks, Lott dismissed Coburn’s suggestion in his good-ole-boy southern style.

Instead, Lott said the Republicans needed to tell voters that putting the Democrats in charge of post-911 America would leave the country vulnerable to terrorist attacks. In other words, Lott’s solution was to scare voters into keeping the Republicans in charge.

Lott might be gone, but the current GOP leadership seems to share the same aversion to actually reforming government. They will attempt to “co-opt” candidates who come to Washington on an anti-spending platform. (See my post on Republican minority leader Mitch McConnell (R-KY)).

In a recent Washington Times piece, John Ellis makes a compelling case for why 2010 is not going to be a replay of 1994:

Nobody can doubt that House Minority Leader John A. Boehner and Senate Republican Leader Mitch McConnell are good and loyal Republicans, but they lack everything that made Mr. Gingrich the author of success in 1994. Both are passive and timid and lack the drive and energy a real leader needs. Both are primarily managers rather than public voices of their caucuses. Neither can dominate a TV screen as Mr. Gingrich could, and neither is able to capture the public’s attention by focusing issues sharply and succinctly. Mr. Boehner is a wooden personality devoid of Mr. Gingrich’s charisma, and the slogan: “Boehner for Speaker,” which is beginning to appear, is hardly inspiring. Mr. McConnell is amiable but retiring, never arresting or incisive.

Indeed, the current Republican leadership bemoans the Obama administration’s reckless big spending and deficits. But other than complain and insist that the president should “pay for” additional spending, the GOP leadership has given no evidence that it recognizes – or even believes – that we actually need a smaller government.

Instead, the GOP has trotted out timid half-measures that they think will play well to the country’s anti-spending mood, but that would actually accomplish very little.

And Your Point Is?

Matthew Yglesias is somehow offended by my recent post about the huge decline in the productivity of our socialized transit industry since 1970. He never addresses or even acknowledges any of the arguments made in my article. Instead, his problem is that the article “fails to acknowledge any government role in promoting the usage of private automobiles.” Since my article was about transit, not automobiles, I don’t see why I need to acknowledge government’s role in driving any more than I should acknowledge government’s role in our failed education system or any other government failing.

It could be that Yglesias is arguing that I am somehow inconsistent because I object to socialized transit without objecting to socialized highways. If so, he would be wrong: In books, papers, and policy statements I have argued that highways should be funded out of user fees, not taxes; that states should encourage private highway construction; and that the federal government should get out of the highway business. That isn’t in any way inconsistent with my article on transit.

It could be that Yglesias is going further and arguing that “government’s role in promoting the usage of private automobiles” somehow contributed to the huge decline in transit productivity since 1970. If so, he would be wrong. Since 1970, government’s role in transportation has mainly been to steal money from the users of roads that carry 85 percent of American passenger travel and spend that money supporting transit systems that move barely 1 percent of all passenger travel. In 2008 alone, more than $15 billion in federal, state, and local highway user fees were spent on transit, which did highway users little good (see cell O17).

Yglesias says that government land-use policies have caused “regulatory impediments” to creating transit-friendly cities. I’ve previously invited Yglesias to join me in calling for the elimination of all government land-use policies, but he has remained silent about that. Instead, he would rather rant about things I didn’t say.

Since Yglesias is so fond of attacking me for things I haven’t said, let me return the favor by pointing out that one of the most common arguments that people like Yglesias use against highways (and he himself may not have made this argument) is what they call “induced demand.” That is, they say we shouldn’t build more roads (even if paid for entirely with user fees) because they will just lead people to drive more. This is supposed to be a bad thing because driving is supposed to be bad. But really, they are admitting that Americans want to use and are willing to pay for more roads, whereas in their demands for more subsidies to transit they are admitting that Americans are not willing to pay for their transit-oriented utopias.

Obama Tells It Like It Is

The New York Times reports:

President Obama signed into law on Wednesday a sweeping expansion of federal financial regulation….

A number of the details have been left for regulators to work out, inevitably setting off complicated tangles down the road that could last for years…complex legislation, with its dense pages on derivatives practices….

“If you’ve ever applied for a credit card, a student loan, or a mortgage, you know the feeling of signing your name to pages of barely understandable fine print,” Mr. Obama said.

Thoughts on NYT National Standards Debate

While national education standards have been advancing largely under the radar, they have at least generated enough attention – probably because there has been a modicum of controversy in Massachusetts – to inspire a New York Times “Room for Debate” installment. I bring this up because (a) such attention is a pretty rare thing, and (b) I’m a contributor and want to critique my “opponents.”

I’ll take my co-discussants one at a time and just pick whatever nits I think need picking. I do so noting that our arguments were supposed to be very short, so it is quite possible that my adversaries have good replies to my complaints and simply couldn’t include the relevant information in their posts.

Here we go:

Richard Kahlenberg: This must seem like Rip Kahlenberg Day, but I assure you it’s not intentional. I just go where the news takes me.

I find Kahlenberg’s response the least persuasive of the entries. He ignores almost all the evidence on national standards, and essentially asserts that such standards make sense because former AFT president – and Kahlenberg biography subject – Albert Shanker wanted them. Oh, and Shanker noted that “virtually all the nations that beat us on international assessments had in place uniform standards.”

National standards don’t make sense because they ignore the political reality in which they would be implemented (not to mention the fact that all kids are different). Taking fifty government monopolies and casting them aside for a single monopoly does nothing to change the crippling problems inherent to monopolies. (The most notable being their utter lack of incentive to perform well.) And could we please dispense with the “all countries that beat us” factoid? As Alfie Kohn thankfully pointed out in his entry, “while most high-scoring countries have centralized education systems, so do most of the lowest-scoring countries.” It is a point, by the way, I fleshed out in my recent analysis Behind the Curtain: Assessing the Case for National Curriculum Standards.

Speaking of Kohn

Surprisingly, I might agree with his entry more than any other. I don’t go for his implication that the national-standards crusade is pretty much just part of a corporate conspiracy to take over the world, though there is a lot of business establishment support for them. For the most part, I think national-standardizers have the best interests of kids at heart.

Where I think Kohn is spot-on is in pointing out that national-standards advocates have willingly – and I think shamefully – ignored research in pushing for their reform; have wrongly conflated “uniformity” with “equity”; and have deceitfully tried to tell the public that they aren’t prescribing curricula when that is the very foundation of their effort.

Bruce Fuller: I have no great problem with Fuller’s contribution, and I appreciate both his reminder that education is about a lot more than what is testable, and that some countries that standardizers hold up as exemplars “are eager to undo rote learning and nurture greater inventiveness among their graduates.” Where I take issue with him is his assertion that “the early days of standards-based accountability clearly produced gains.” There were certainly gains during the early days of state-level standards and testing, but as I discuss in Behind the Curtain, there is little research showing that standards drove those improvements. And there’s the huge problem of the failure to sustain those improvements as students advance in years and grades…

Michael Goldstein: He says he likes national standards, but everything he cites to promote them argues for moving in the opposite direction:

Because of differing state standards, Goldstein’s Massachusetts charter school can’t use curricula it developed with Houston. If anything, that suggests that state standards – not a lack of national standards – is the problem, both because it makes sharing between schools in different states very hard, and because both states would have to change their standards for Goldstein and his partner to use anything new and powerful they came up with.

Next, Goldstein writes that the internet and other advances have made all kinds of educational material readily available, and national standards would make them more useful. Quite the contrary: Having incredible access to innovation cries out for the ability to use those innovations, not forcing everything to comply with a single standard.

Finally, Goldstein doesn’t like Texas’ new social studies standards, and wants national standards to keep states from going off the reservation. But what happens when the people Goldstein doesn’t like control the national standards? (As I recall, the previous presidential administration had a lot of Texans.) Instead of just not living in Texas, as he can do now, I guess he’d have to move to another country. On the flip side, if there were no state standards, he could even safely live in the Lone Star State.

Last but not least, there’s Sandra Stotsky:  Stotsky’s main concern is the content of the national standards themselves, and that’s just not my big worry. I am concerned about what the standards are likely to become once they’re in the system, not what they are before. That said, Stotsky has done some very interesting analyses of the national language arts standards, and her efforts at the very least point out one, important thing: there isn’t uniform agreement that the national standards are the best standards ever, even if every Gates-funded outfit says they are. And that means there’s lots of need for continued competition, innovation, and freedom – all things national standards by their very nature will quash.

A Response to Gruber on RomneyCare & Health Care Costs

I just came across this letter to the editor of the Wall Street Journal from MIT economist Jonathan Gruber.  I don’t know how to confine myself to just one of the letter’s many problems. So brace yourselves, here comes the fisk.

Joseph Rago’s article on Massachusetts health-care reform (“The Massachusetts Health-Care ‘Train Wreck’,” op-ed, July 7) is exactly the type of selectively misleading use of facts upon which opponents of health-care reform have been relying over the past year.

No comment, other than remember the phrase “selectively misleading use of facts.”

Health-care reform in Massachusetts has covered 60% of the state’s uninsured, has done so at roughly the cost projected before reform was enacted in 2006, and remains overwhelmingly popular with the residents of the state.

Regarding coverage gains, Massachusetts officials used to claim that RomneyCare reduced the share of uninsured residents from around 10 percent to 2.6 percent.  In a study released this year, Aaron Yelowitz (a former student and coauthor of Gruber’s) and I show why that figure is too low and why the actual figure is likely 5.1 percent or higher.  The study on which Gruber relies – like all other such studies – neither mentions nor attempts to measure the problem that Yelowitz and I identified: uninsured Massachusetts residents appear to be responding to the individual mandate by concealing their lack of insurance, which would inflate the coverage gains.  Since that study obtained results similar to our results for Massachusetts adults, that study’s estimate of a 60-percent reduction in the uninsured appears to be an upper-bound estimate, rather than a point estimate.

Regarding costs, I haven’t seen any updated numbers since the Massachusetts Taxpayers Foundation’s whitewash from May 2009.  I’d like to see an updated, non-whitewashed report on actual spending and how it compares to the original projections, especially considering that in 2006, the Kaiser Family Foundation reported that Massachusetts “anticipates that no additional funding will be needed beyond three years.“  Updated figures would also allow us to judge how much RomneyCare spent per newly insured resident.

The state has seen a decline in its nongroup premiums of more than 50% relative to national trends…It reduced the costs to individuals of purchasing insurance…[an] enormous reduction relative to pre-reform…

Here’s where Gruber engages in his own “selectively misleading use of facts.”  Yes, non-group premiums appear to have fallen for the 4 percent of residents in the non-group market – because RomneyCare shifted those costs to workers with job-based coverage.

It is true that reform has not slowed the growth of group health-insurance premiums, which have continued to rise at exactly the same rate as in the nation as a whole.

The first part of this sentence is an understatement; the second part is false.  This report from the left-wing Commonwealth Fund shows that premiums in Massachusetts are growing faster than anywhere else in the nation.  And the only study that has tried to isolate the effect of RomneyCare finds that it increased premiums for employment-based coverage by 6 percent (see cost-shifting, above).

Despite Gov. Mitt Romney’s claims, the Massachusetts reform was not designed to slow the growth of health-care cost growth.

It should be obvious by now that RomneyCare wasn’t designed that way.  But it sure was sold that way.  And so was ObamaCare.  Any bets on how long before we hear apologists for both claiming that ObamaCare wasn’t designed to slow cost growth?

The PPACA also includes a series of changes that represent the best thinking about how to control costs, such as an independent rate-setting board for Medicare, pilots of innovative medical reimbursement approaches, and an end to the open-ended tax subsidy to the highest cost health insurance plans in the U.S. None of these is guaranteed to slow the rate of cost growth. But each is better than doing nothing, which was the alternative.

So the, ahem, best thinking on how to contain health care costs is (1) price and exchange controls set by (2) an unelected and unaccountable rationing board, plus (3) taxing health insurance.  Bra-vo. Sure, Obama’s National Economic Council chairman Larry Summers says, “Price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time.” But when the alternative is nothing – nothing! – that means the bar for “best thinking” isn’t very high.

In the end, it is impossible to control health-care costs without first bringing as many citizens as possible into our health-insurance system.

As I blogged earlier today, it does not speak well of the Left’s approach to health care that in order to reduce wasteful government spending – or at least pretend to – they must first create more wasteful government spending.