Tag: competition

Well-Worn Ideological Grooves II

The Consumerist relates the story of a potential Verizon customer who grew frustrated with his inability to get its high-speed FiOS Internet service. After resorting to emailing the CEO of the company, his service was promptly installed.

“Verizon is a corporation who cares about their customers and not only about the bottom line,” wrote the newly happy customer.

Now ask yourself: Just how separable are “caring for customers” and “the bottom line”?

It’s interesting that many people’s ideological grooves have these concepts in opposition. But business owners know how much time they spend slavishly trying to please customers—because that affects their bottom lines. When big businesses do it badly, that affects their bottom lines and invites competition.

(Needless to say, the telecommunications area needs more competition, to bring customer service and bottom lines closer together).

See also: Well-Worn Ideological Grooves I

Cell Phones and Ingratitude

When I was a kid in the 1960s and we came back from a visit to my grandmother’s, my mother used to call my grandmother, let the phone ring twice, and then hang up. It was important for my grandmother to know that we’d arrived home safely, but long-distance telephone calls were too expensive to indulge in unnecessarily. When I entered Vanderbilt University in 1971, my parents had to decide whether to pay for a telephone in my dorm room. They decided to do so, but most of the thoroughly upper-middle-class students on my floor did not have phones. Phones cost real money back then. Then came the breakup of the AT&T monopoly in 1984. Phone technology and competitive service provision exploded. In 1982, Motorola produced the first portable mobile phone. It weighed about 2 pounds and cost $3995. Within a very few years they were much smaller, much cheaper, and selling like hotcakes.

Today there are some 4.6 billion mobile phones in the world, and counting, or about 67 per every 100 people in the world. The newer ones allow you to carry in your hand more computing power than the computers that put Apollo 11 on the moon.  You can cruise the internet, find your location with GPS, read books, send texts, pay bills, process credit cards, watch video, record video, stream video to the web, take and send photos – oh, and make phone calls from just about anywhere. Unimaginable just a few years ago.

And to celebrate this incredible achievement, Slate and the New America Foundation are holding a forum titled “Can You Hear Me Now? Why Your Cell Phone is So Terrible.”

This is an old story. Markets, property rights, and the rule of law provide a framework in which technology and prosperity soar, and some people can only complain. I was reading some of Deirdre McCloskey’s forthcoming book Bourgeois Dignity this week. She points out that the average person lived on the equivalent of $3 a day in 1800. Today there are six and a half times as many people, but the average person earns and consumes 10 times as much, far more than that in the most capitalist countries. And yet some people, most leftist intellectuals, continue to ignore what McCloskey calls “the gigantic gains from bourgeois dignity and liberty” and to denounce the markets, economic liberalization, and globalization that have liberated billions of people from eons of back-breaking labor.

Now don’t get me wrong. I’m a big fan of consumer reporting and analysis, which is an important part of a robust marketplace. Competition and consumer reporting both help to keep prices low and quality improving. And there’s plenty of room for criticism of cell phone pricing, contracting, and service. But when a discussion like this is held by a public policy research organization and a public-affairs magazine as part of a program on public policy, then it’s not just consumer advice. It is presumably a discussion of what the sluggish, coercive institution of government can do to improve – or more likely impede – a fabulously dynamic, constantly improving consumer-directed industry. And that usually ends in tears.

Maybe we should hold a forum titled “Can You Hear Me Now? And Watch Me on Video? And Read My Book on Your Handheld Device? And Check Your Blood Pressure and Glucose? How Markets, Innovation, and Entrepreneurs Have Taken Cell Phone Technology from Clunker to Computer in Barely a Generation.”

Massachusetts Treasurer Blasts RomneyCare and, Equivalently, ObamaCare

Massachusetts state treasurer and recent Democrat Timothy Cahill has harsh words for the health plan foisted on his state and the identical plan that President Obama is trying to foist on the nation.  From The Boston Globe:

“If President Obama and the Democrats repeat the mistake of the health insurance reform here in Massachusetts on a national level, they will threaten to wipe out the American economy within four years,” Cahill said in a press conference in his office.

Echoing criticism leveled by congressional Republicans in recent weeks, Cahill said, “It is time for the president, the Democratic leadership, to go back to the drawing board and come up with a new plan that does not threaten to bankrupt this country.”

[T]he state’s health insurance law…Cahill said, “has nearly bankrupted the state.”

Cahill said the law is being sustained only with the help of federal aid, which he suggested that the Obama administration is funneling to Massachusetts to help the president make the case for a similar plan in Congress.

“The real problem is the sucking sound of money that has been going in to pay for this health care reform,” Cahill said. “And I would argue that we’re being propped up so that the federal government and the Obama administration can drive it through” Congress.

Commonwealth Connector, the independent state agency established to help residents find the health insurance, has “totally failed,” to create competition and connect people with affordable insurance, Cahill said, pointing out that 68 percent of the residents it serves receive subsidized care.

“We haven’t done anything about driving down costs,” Cahill said. “We haven’t helped small business. We haven’t changed the way we pay for health care and the way we deliver it.”…

Asked for solutions today, Cahill said he would seek to “level the playing field” between hospitals that charge different rates for similar procedures, seek to increase competition by allowing health insurance companies plans to sell plans across state lines, and would slash benefits mandated under state law.

For more on the Massachusetts health plan, see “The Massachusetts Health Plan: Much Pain, Little Gain.”

The Standards Themselves Are, Frankly, Irrelevant

Three days ago I reported that draft, grade-by-grade, national curricular standards would soon be released by the Common Core State Standards Initiative. Yesterday, they were. (If you want to get a sense for what the proposed standards are follow the link to them. Don’t bother with the appendices, though, unless you really want to get into the weeds.)

Naturally, in the coming days lots of people will be offering heaps of commentary about what the standards do or do not contain. That’s not my main concern (though reading through the English standards I am dubious that mastery of them could be easily or consistently assessed). You see, the content of the standards is largely irrelevant because the main problem isn’t what the standards are, but standardization itself.

As I’ve blathered about on numerous occasions, it makes little sense to expect all kids to master all the same things at the same rates. All kids are different – they have different talents, desires, and abilities – and to impose one, “best” progression on them is simply illogical.

Another problem with imposing a single standard nationwide – and yes, this will be imposed, unless states suddenly decide they don’t like getting their citizen’s tax dollars back from Uncle Sam – is that it prevents competition between curricula. And that, in turn, kills innovation, the lifeblood of progress. So unless these standards have achieved perfection – and I’m pretty sure they haven’t – it’s a very dangerous thing to make them the end-all and be-all.

Finally, no matter how brilliant the draft standards, there is no reason to believe that they will drive meaningful educational improvement. Government schools will still be government schools, and the people employed by them will still have very little incentive to push kids to excellence, and every incentive to game the system to make the standards toothless. And no one yet has offered a decent proposal, other than school-choice supporters, for getting around that very inconvenient, public-schooling truth.

All of these problems help to explain why there is no convincing empirical evidence that national standards drive superior educational outcomes. Unfortunately, most national-standards advocates will talk themselves blue in the face about what’s in the standards, but avoid at all costs the question of whether standardization makes sense in the first place.

Six Reasons to Downsize the Federal Government

1. Additional federal spending transfers resources from the more productive private sector to the less productive public sector of the economy. The bulk of federal spending goes toward subsidies and benefit payments, which generally do not enhance economic productivity. With lower productivity, average American incomes will fall.

2. As federal spending rises, it creates pressure to raise taxes now and in the future. Higher taxes reduce incentives for productive activities such as working, saving, investing, and starting businesses. Higher taxes also increase incentives to engage in unproductive activities such as tax avoidance.

3. Much federal spending is wasteful and many federal programs are mismanaged. Cost overruns, fraud and abuse, and other bureaucratic failures are endemic in many agencies. It’s true that failures also occur in the private sector, but they are weeded out by competition, bankruptcy, and other market forces. We need to similarly weed out government failures.

4. Federal programs often benefit special interest groups while harming the broader interests of the general public. How is that possible in a democracy? The answer is that logrolling or horse-trading in Congress allows programs to be enacted even though they are only favored by minorities of legislators and voters. One solution is to impose a legal or constitutional cap on the overall federal budget to force politicians to make spending trade-offs.

5. Many federal programs cause active damage to society, in addition to the damage caused by the higher taxes needed to fund them. Programs usually distort markets and they sometimes cause social and environmental damage. Some examples are housing subsidies that helped to cause the financial crises, welfare programs that have created dependency, and farm subsidies that have harmed the environment.

6. The expansion of the federal government in recent decades runs counter to the American tradition of federalism. Federal functions should be “few and defined” in James Madison’s words, with most government activities left to the states. The explosion in federal aid to the states since the 1960s has strangled diversity and innovation in state governments because aid has been accompanied by a mass of one-size-fits-all regulations.

For more, see DownsizingGovernment.org.

A Severe Irony Deficiency

Tomorrow night at 8:00pm, Fox Business News will air a John Stossel special on the failures of state-run schooling and the merits of parental choice and competition in education. I make an appearance, as do Jeanne Allen and James Tooley.

News of the show is already making the rounds, and over at DemocraticUnderground.com, one poster is very upset about it, writing:

When will these TRAITORS stop trying to ruin this country?

HOW can AMERICANS be AGAINST public education?

Stossel is throwing out every right-wing argument possible in his namby pamby singsong way while he “interviews” a “panel” of people (who I suspect are plants) saying things like preschool is a waste of money and why invest in an already-failing system….

I hate Stossel and I hate all of those who think the way he does.

This poster goes by the screen name “Live Love Laugh.” I guess there wasn’t enough space to tack “Hate” onto the end.

What this poster–and many good people on the American left–have yet to grasp is that critics of state monopoly schooling are NOT against public education. On the contrary, it is our commitment to the ideals of public education that compels us to pursue them by the most effective means possible, and to abandon the system that has proven itself, over many many generations, incapable of fulfilling them. I wrote about this crucial point more than a decade ago in Education Week, in a piece titled: “Are Public Schools Hazardous to Public Education.”

Fortunately, a small but steadily growing number of American liberals have already grasped this pivotal difference between means and ends, as the growing Democratic support for Florida’s school choice tax credit program evinces. Giving all families, particularly low income families, an easier choice between state-run and independent schools is the best way to advance the ideals of public education.

Globalization: Curse or Cure?

Globalization holds tremendous promise to improve human welfare but can also cause conflicts and crises. How will competition for resources, employment, and growth shape economic policies among developed nations as they attempt to maintain productivity growth, social protections, and extensive political and cultural freedoms?

In a new study, Cato scholar Jagadeesh Gokhale offers policy recommendations for developed nations to reduce globalization’s negative effects and, indeed, harness it for solving economic challenges.