Archives: 10/2010

Reform for Senate Elections?

People inside the Beltway seem to think that the only things worth being said and written are said and written in Washington. John David Dyche’s column today makes a good case for the quality of commentary outside the all-knowing capital.

While most everyone in DC is calling the stretch run of the horse race, Dyche steps back and wonders whether the Kentucky Senate race would have been better for citizens if the U.S. Constitution had not been changed to direct election of senators. He thinks it would be.

I am not so certain. As Dyche notes, James Madison thought the representative or indirect aspects of American constitutional democracy would improve public choice. As times has passed, I wonder more and more about the quality of people drawn to all legislatures, including state bodies. Madison thought indirect election wold “refine and enlarge the public views by passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true interest of their country and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partial considerations.” Should we still rely on the wisdom of that medium? And yet, what is the alternative? (Todd Zywicki has an informative article on the origins and demise of indirect election of senators).

Dyche works as an attorney in Louisville, Kentucky, and has written a nice biography of Mitch McConnell. His column is worth a regular read, especially if Rand Paul comes to Washington as a U.S. Senator. Dyche would be a good guide to how Paul’s libertarian tendencies are playing out politically back home.

Private Ownership of Public Law

Carl Malamud is a breakthrough thinker and doer on transparency and open government. In the brief video below, he makes the very interesting case that various regulatory codes are wrongly withheld from the public domain while citizens are expected to comply with them. It’s important, mind-opening stuff.

It seems a plain violation of due process that a person might be presumed to know laws that are not publicly available. I’m not aware of any cases finding that inability to access the law for want of money is a constitutional problem, but the situation analogizes fairly well to Harper v. Virginia, in which a poll tax that would exclude the indigent from voting was found to violate equal protection.

Regulatory codes that must be purchased at a high price will tend to cartelize trades by raising a barrier to entry against those who can’t pay for copies of the law. Private ownership of public law seems plainly inconsistent with due process, equal protection, and the rule of law. You’ll sense in the video that Malamud is no libertarian, but an enemy of an enemy of ordered liberty is a friend of liberty.


National Standards to Help Crush Annoying Dissenters

One of the most regrettable outcomes of government schooling is constant, wrenching conflict as diverse people are forced to fight over the uniform school system they all have to support. Sadly – and in complete opposition to the foundational American value of individual liberty – one of the few ways these conflicts can be resolved is by crushing groups with insufficient political power, keeping them from getting the education they want for their children.

Unfortunately, making it easier to do exactly that seems to have motivated at least some people in Kansas to support their state’s adoption of federally backed “Common Core” standards. Under the guise of removing politics from public schooling – meaning, crippling the ability of those who disagree with them to fight back  – some supporters are lauding the standards especially if they are extended to science. Then, the state wouldn’t have to deal with the highly divisive question of how to teach human origins. The assumption, it seems, is that by adopting national standards evolution skeptics in Kansas would be overruled not just by evolution supporters in Kansas, but, de facto, supporters nationwide:

The movement toward national standards — the Kansas State Board of Education joined the program earlier this month — comes with plenty of advantages, said Rick Doll, superintendent of the Lawrence school district.

Among them is snuffing the likelihood of political flare-ups, such as the off-and-on debate over whether Kansas should de-emphasize the teaching of evolution in public schools.

“What we teach in school should not be dependent on the political leanings of a governing body,” Doll said. “With this, there’s less chance of that happening.”

Whether you are the most zealous creationist or the ardent Darwinist, this thinking should frighten you.

For one thing, having national standards will only push the fighting to the national level, threatening to tear apart the entire country with conflicts that could have been contained within state or district boundaries. Moreover, the fighting is likely to be even more intense, because with national standards there’s nowhere to go but out of the country if you lose. And that raises what should be the most alarming point for national-standards advocates: What happens if and when you are not in power? Then everyone will get stuck with not only what you dislike, but what, if you are right, might even be educationally or socially dangerous. But you’ll only have yourself to blame. After all, you’ll have built the nuke suddenly pointing at you.

P. J. O’Rourke — in Print, on the Radio, and in Person

P. J. O’Rourke, Cato’s H. L. Mencken Research Fellow, is touring the country to talk about his new book, Don’t Vote: It Just Encourages the Bastards. Today he has a commentary on NPR. And the day after the election, he’ll be discussing the book and no doubt the election results at a Cato Book Forum.

You can find more book signings and media appearances at www.pjourke.com.

Marijuana and Freedom

Looking to election day and California’s vote on a marijuana legalization initiative, I have some comments on “the right to control your body” at Britannica Blog:

People have rights that governments may not violate. Thomas Jefferson defined them as the rights of life, liberty, and the pursuit of happiness. When I’m asked what libertarianism is, I often say that it is the idea that adult individuals have the right and the responsibility to make the important decisions about their own lives. More categorically, I would say that people have the right to live their lives in any way they choose so long as they don’t violate the equal rights of others. What right could be more basic, more inherent in human nature, than the right to choose what substances to put in one’s own body? Whether we’re talking about alcohol, tobacco, herbal cures, saturated fat, or marijuana, this is a decision that should be made by the individual, not the government. If government can tell us what we can put into our own bodies, what can it not tell us? What limits on government action are there?

It’s part of a symposium on Proposition 19 and marijuana.

Jerry Brown’s Charter Schools ‘Among the Top’?

When Jerry Brown touts his record on education on his campaign website, he starts by citing the two charter schools he founded, calling them “among the top-performing schools in Oakland.” They aren’t – not when measured by academic achievement, at any rate.

The chart below shows the percentage of students in Brown’s two charter schools who score at or above the “proficient” level on the California Standards Tests (averaged across all available grades and subjects). The results are broken out a few different ways to show that they are not particularly sensitive to demographics.

Far from being “among the top,” Jerry Brown’s schools are marginally lower-scoring than the abysmal Oakland Public Schools, and fantastically far below the city’s real top performers: the American Indian Public Charter Schools network (3 schools) and the Oakland Charter Academies (2 schools).

Another of Mr. Brown’s campaign website claims is more credible: “I have gained first-hand experience in how difficult it is to enable all students to be ready for college and careers.” Perhaps if Mr. Brown had taken the time to learn from and emulate the two charter school networks that are already achieving that goal in his own backyard, Californians would have greater confidence in his education policy acumen.

Liberal Dogma on Social Security Redux

Liberal posturing on Social Security reform continues unabated – betraying nervousness that Obama’s Deficit Reduction Commission will recommend Social Security benefit cuts. 

Left-wing voices also continue to repeat the mantra that introducing private Social Security accounts would be a bad idea. Ronald Brownstein’s recent recent column in the National Journal is a case in point. However, Brownstein’s readers may come away thinking that he believes breaking promises is a good idea.

Brownstein concedes that “Social Security indeed faces a long-term imbalance between expected revenue and promised benefits.” I consider this to be progress — at least relative to the erstwhile “there’s nothing wrong and nothing to fix” mantra adopted by liberal adherents of the status quo on Social Security.

Notice Brownstein’s use of the term “promised benefits.”  A promise implies a commitment and obligation to make good on future benefit payments.  But the solution that Mr. Brownstein points to is as follows:

Instead [of private accounts], Obama argued, the two parties could emulate the Reagan model and arrive at a sensible solution… [T]he program’s long-term shortfall could be eliminated just by trimming benefits for the top half of earners [JG note: breaking the Social Security benefit promise here], linking the retirement age to lengthening life spans [JG note: breaking the promise here too], and imposing a partial payroll tax on earnings above $250,000 [JG note: that is, promise more benefits by expanding the definition of covered earnings and increasing payroll taxes on high earners].”

But all that the last element may achieve is to stave of the program’s insolvency for a few more years. 

My comment:  Please don’t drag Reagan into this “solution.”  The 1983 reforms were implemented under the gun, at a time when there was no way out of Social Security’s imminent revenue shortfall. If President Reagan had enjoyed the luxury of a couple more years to plan changes to Social Security, he would have adopted a different approach, and be much better off today. According to broad market indexes such as the S&P 500, total returns averaged well above 10 percent per year during the 1980s and 90s – so, well above inflation. (The first decade of the 2000s yielded a negative 1 percent return.)

Finally, Brownstein writes:

[T]he gap between the system’s revenues and obligations, relatively speaking, isn’t that daunting–less than 1 percent of the economy’s expected output over the next 75 years. 

Does Mr. Brownstein really appreciate how large that is? In present value terms, the Social Security actuaries report that the present value of Social Security’s shortfall over the next 75-years equals $5.4 trillion. That’s one-third of current annual GDP. In other words we have to devote that sum to earning interest each year for 75 years to cover Social Security’s financial gap.

Alternatively, since payrolls equal only one-half of national output, it means that payroll taxes would have to increase by an average of about 2.0 percent per year if they are levied over all wage earners.  However, the tax increase is to be levied only on those earning $250,000 or more.  There are about 3 million U.S. taxpayers with incomes above $250,000, with average income of about $500,000. (I’m rounding up based on information for 2006 available here.)  That makes a tax base of $1.5 trillion. (Actually, this is likely to be too large because I’m counting total income, not taxable income, which would be much smaller.) Raising the equivalent amount of revenues from these high earners (who face the highest marginal income tax rates already and are likely to alter their work effort in response to still higher taxes) would imply increasing their average tax rates by almost 11 percentage points. Of course, because some of the adjustment will be through benefit cuts and indexing the retirement age to increasing longevity, the tax increases that must be levied on high earners would be smaller. 

But are those benefit cuts politically realistic? Americans already face a normal retirement age of 66, and it is scheduled to increase to 67 in little more than a decade. Extrapolating from the French response to increasing their pensionable age from just 60 to 62, Americans’ would probably end up opening a third war front to resist further increases in Social Security’s retirement ages – a “generational war” here at home.

So where do we go from here?  One answer may be to first introduce “add-on” personal accounts using the 2.0 percentage points of payrolls – the amount required to plug Social Security’s current shortfall. This would not be a “tax” as the funds would be invested in personal accounts – and it would enable low earners an opportunity to partake in the long-term wealth creation mechanism that they have heretofore been unable to exploit.  As I have argued here, if this amount is effectively saved and invested – by insuring that the government does not borrow and spend those savings – it would create space for a “carve-out” addition to the “add on” personal accounts, increasing retirement wealth even more.  Finally, with the stock markets relatively stable and current P/E ratios of broad market indexes close to historical averages, now would be the right time to begin such a reform program for Social Security. 

Would liberal policymakers and analysts take on this approach?  No prizes for guessing the answer.