Tag: georgia

Auto Dealers Attempt to Ban Tesla from Georgia

Rather than selling cars through independent dealers, the upstart electric car maker Tesla sells its automobiles directly to consumers. However, many states prohibit direct auto sales, thanks to laws from the mid-20th century that ostensibly were intended to protect dealers from automakers’ market power. The need for that protection was questionable when the laws and regulations were adopted and are even more dubious in today’s highly competitive auto market. But they are especially inappropriate when applied to a small new automaker that solely wants to engage in direct sales.

This week, the Georgia Automobile Dealers Association filed a petition with the state’s Department of Revenue in an attempt to bar further sales of Tesla sedans. Such battles have erupted in numerous states, from Missouri to New Jersey. In the latest issue of Regulation, University of Michigan Law professor Daniel Crane argues that dealer distribution restrictions are based on faulty ideas of consumer protection. Traditional dealers claim that competition among a brand’s dealers prevents the manufacturer from “gouging” consumers and extracting monopoly profits. Crane argues that standard economic theory demonstrates that these claims are nonsense. Firms with market power will be able to claim monopoly profits, regardless of whether middlemen, such as dealerships, are involved.

Moreover, by restricting competition among business models for auto sales, laws such as those in Georgia stifle competition among automakers. When companies such as Tesla seek to lower costs through innovative business designs, they face costly regulatory hurdles and legal challenges such as the sales ban in Georgia. These laws protect existing dealers and hurt consumers.

Not Just Another Friday in Brussels

While a typical summer Friday in the capital of the European Union might sound like a rather dull affair, today brought two significant events–one of them good, the other one less so.

First, the good news. Today, Ukraine, Moldova, and Georgia signed their association agreements with the European Union (EU). The treaties consist of, in part, free trade agreements between the EU and the three countries, and also a roadmap toward a prospective EU membership. Given the economic and political shape these countries find themselves in, the latter will likely take a long time and will not be without hurdles. After all, Turkey signed its association agreement back in 1963 and the country is still not a member.

There can be little doubt that free trade agreements with the EU will do good to these impoverished economies (GDP per capita in Moldova is just a little over $2,000) as well as to the EU. Furthermore, the prospect of a timely EU membership will hopefully serve as an impetus for economic and institutional reforms–just as was the case in the countries of Central and Eastern Europe that joined the EU in the past decade.

Of course, the EU is far from perfect and it is quite possible that these countries will soon grapple with the same problems as Slovakia, Czech Republic, or Bulgaria–namely how to manage the inflow of “structural funds” into their economies without encouraging corruption and entrenchment of venal elites. But arguably, that will not be the worst problem to have, considering that the alternative is the continuation of the status quo, muddling along from one crisis to another and being part of Russia’s zone of influence. Further enlargement, extending the common market and free movement of people further east, will likely prove to be beneficial to the EU as well.

Second, the bad news. The EU leaders have appointed Jean-Claude Juncker as the new head of the European Commission. Although initially the governments of Sweden and Netherlands had misgivings about his presidency, in the end it was only the UK’s prime minister, David Cameron, who decided to openly oppose the nomination.

The issue is not just with the personality of the candidate, but also with the process through which Juncker was selected. For the first time, the European Parliament took the lead in picking the head of the Commission, while no treaty empowers it to do so. While the appointment needs to rely on a parliamentary majority, the choice has always been made by the political leaders of EU member states, not by the Parliament. For those who do not wish to see the accountability of the Commission to national politicians wane completely, the Juncker appointment should be a cause for concern.

Let us hope that these two events are not completely unrelated. Hopefully, the prospect of another eastward enlargement will serve as an impetus for European policymakers to look for a model of European governance that provides the benefits of the common market and effective action on issues of mutual interest, without entrenching an obscure and unaccountable center of power in Brussels. 

School Choice Lawsuits and Legislation Roundup

We’re only at hump day but this week has already seen the filing of a new anti-school choice lawsuit, the dismissal of another, the potential resolution of a third, and the adoption of a new school choice program. [UPDATE: Plus the passage of a second school choice program. See below.]

Alabama: Yesterday, a federal judge dismissed the Southern Poverty Law Center’s ridiculous lawsuit against Alabama’s scholarship tax credit program which essentially claimed that the program unconstitutionally violated the Equal Protection clause since it did not solve all the problems facing education in Alabama. The SPLC argued that the law creates two classes of citizens: those who can afford decent schooling and those who cannot. In fact, those classes already exist, but the law moves some students from the latter category into the former, as the judge wisely recognized:

“The requested remedy is arguably mean: Withdraw benefits from those students who can afford to escape non-failing schools. The only remedy requested thus far would leave the plaintiffs in exactly the same situation to which they are currently subject, but with the company of their better-situated classmates. The equal protection requested is, in effect, equally bad treatment,” the judge said.

The scholarship program still faces a lawsuit from Alabama’s teachers union.

Georgia: Anti-school choice activists filed a lawsuit against Georgia’s scholarship tax credit program, alleging that it violates the state constitution’s ban on granting public funds to religious institutions. The lawsuit is longer and more complicated than similar suits in other states, and portions requesting that the government enforce certain accountability measures (e.g. - making sure that only eligible students are receiving scholarships) may actually have merit. However, the central claim that a private individual’s money becomes the government’s even before reaching the tax collector’s hand has been forcefully rejected by the U.S. Supreme Court and other state supreme courts with similar constitutional language.

Kansas: In the best school choice news of the week, as a part of its school finance legislation, Kansas lawmakers included both a scholarship tax credit program for low-income students and a personal-use tax credit. The former would grant corporations tax credits worth 70% of their donations to scholarship organizations that aid students from families earning up to 185% of the federal poverty line. The program is capped at $10 million. The personal-use tax credit grants $1,000 per child in tax credits against the family’s property tax liability up to $2,500 in total for any family without any students attending a government school. [UPDATE: The personal-use tax credit was not adopted in the final committee of conference report.]

Louisiana: A federal judge has mostly sided with the U.S. Department of Justice in its lawsuit demanding that Louisiana fork over data about students participating in the state’s school voucher program, including their race and the racial breakdown of both the government schools they are leaving and the private schools they want to attend. The DOJ wanted that data so that it can challenge individual vouchers if a student’s departure would leave a district “too white” or “too black” (no word yet on whether the DOJ will challenge families whose decision to move out of the district has the exact same impact). However, the judge required the state to provide the data to the DOJ only 10 days before issuing vouchers rather than 45 days beforehand, as the DOJ had requested. A study sponsored by the state of Louisiana determined that the voucher program has had a positive impact on racial integration.

Lawsuits against scholarship tax credit programs in New Hampshire, North Carolina, and Oklahoma are still pending. Parents for Educational Freedom in North Carolina released the following video announcing their efforts to fight the lawsuit:
http://www.youtube.com/watch?feature=player_embedded&v=YzEs1t6hDsA

UPDATE: 

Alaska: Last night, Alaska’s House of Representatives passed a scholarship tax credit program. The bill still has to go to the state senate and the governor.

New Study Explains How and Why Parents Choose Private Schools

Why do parents choose a particular school? What information do they consider in making that choice? Do they prioritize high standardized test scores, rigorous college preparation, moral or religious instruction, or something else?

This morning, the Friedman Foundation released a new study, “More Than Scores: An Analysis of How and Why Parents Choose Private Schools,” that sheds light on these questions. The study surveyed 754 low- and middle-income parents whose children received scholarships from Georgia GOAL, a scholarship organization operating under Georgia’s scholarship tax credit law.

The study’s findings provide analysts and advocates across the education policy spectrum with much to consider. 

Obamacare Increases Man’s Premiums 300%, Supporters Call It a Success Story

Obamacare’s health insurance Exchanges opened for business, in most states, sort of, on Tuesday. Millions of people have reportedly flooded the Exchanges, but have had so much difficulty using the web sites that reporters have had a hard time finding anyone who has successfully enrolled in an Obamacare plan. The Washington Post’s Sarah Kliff writes:

Just moments after writing a blog post Thursday morning, about the lack of information on Obamacare enrollees, Enroll America reached out with contact information for Chad Henderson, a 21-year-old in Georgia who had successfully enrolled in coverage on the federal marketplace.

Chad is evidently a scarce commodity.

It was a little difficult to reach Henderson, mostly because so many other reporters wanted to talk to him. “I’m supposed to talk to the Chattanooga Times Free Press in a half hour,” Henderson said. “And The Wall Street Journal is supposed to call.”

Luckily, Henderson managed to squeeze me in for a few minutes.

Kliff reports that after a three-hour ordeal, Chad bought an Obamacare plan that cost him $175 per month – pretty steep, considering he makes less than $11,500 per year. His Obamacare premium comes to least 18 percent of his income. And no, Chad is not eligible for subsidies.

Compare that to what Chad could have paid if he bought one of the pre-Obamacare plans still available on eHealthInsurance.com until December 31. The cheapest such plan for someone meeting Chad’s profile is just $44.72 – as little as 5 percent of his annual income and about one-quarter of his Obamacare premium.

I can’t yet say whether Chad’s $175 premium is the lowest-cost plan available to him through the Exchange. (I’m in the process of researching that. Let’s just say it’ll probably take a few hours.) But it’s probably close. The cheapest plan available to him through eHealthInsurance.com after Obamacare’s community-rating price controls take effect in 2014, and drive up premiums for young, healthy people market-wide, is $190.23. That’s with the maximum cost-sharing allowed under Obamacare. So it appears Obamacare quadrupled Chad’s premiums, and Enroll America thinks that is a success story.

To me, the most interesting part is that Chad didn’t buy health insurance when it was available to him for just $45 per month, but did buy it at an unsubsidized $175/month premium. Why? Again, Kliff:

He describes himself as a supporter of President Obama who has anxiously awaited Obamacare’s rollout…

Part of his decision was ideological: He wants the health-care law to succeed.

Obama Administration Should Close NATO Door to Georgia

Although many members of the defense establishment haven’t seemed to notice, the Evil Empire collapsed. The Soviet Union is gone, along with the Warsaw Pact. Europe is wealthier than America. Why is Washington still pushing to expand NATO?

In May, Secretary of State John Kerry announced that “We are very supportive of Georgia’s aspirations with respect to NATO.” In June NATO Secretary General Anders Fogh Rasmussen visited Tbilisi, where he said that once Tbilisi made needed reforms “the burden will be on us to live up to our pledge that Georgia will be a member of NATO.”

Alas, the biggest burden of adding Tbilisi would fall on the United States. The administration should halt the process before it proceeds any further.

The North Atlantic Treaty Organization was created to contain Joseph Stalin’s Soviet Union. The U.S.S.R.’s demise left NATO without an enemy. The alliance desperately looked for new duties, finally settling on “out-of-area” responsibilities. 

In essence, the alliance would find wars to fight elsewhere, such as in Afghanistan and Libya, while expanding eastward toward Moscow. That process continues today. For instance, Rasmussen declared: “Georgia’s full Euro-Atlantic integration is a goal we all share” 

That’s a dumb idea. Georgia would be a security liability to the United States and Europe.

Is Education Nationalization Falling Apart?

While the fight against nationalizing education has focused primarily on the Common Core, the nationalization offensive seems to be falling apart on the testing front; a classic, it’s-the-one-you-don’t-see-that-gets-you situation. Yes, several states have seen recent, serious resistance to the Core–I just testified about this in Arkansas–but no state that officially adopted the Core has unadopted it.

Then there’s the testing.

Two days ago, Georgia declared that it would be leaving the Partnership for Assessment of Readiness for College and Careers–one of the two testing consortia chosen by the U.S. Secretary of Education to receive big federal grants–and would pursue its own tests. Georgia joins Pennsylvania, Alabama, Oklahoma and Utah heading out the exits, with strong rumblings that Indiana and Florida will be joining them. (I wrote about Florida “padding” school assessments yesterday.) Why is this important? Because as Chester Finn of the Thomas B. Fordham Foundation has written, for standards-based reform to work, there must be a “tripod of standards, testing, and accountability.” And for national standards to work, there must be a national tripod: all schools must use the same standards and tests to compare how all kids are doing, and there must be uniform punishments for schools that do not do well. As Finn is quoted in the Washington Post as saying, if states use their own tests, “We won’t be able to compare their test scores—it’s almost as simple as that.”

This raises the crucial question: who must be in charge of constructing and maintaining the tripod to get everyone uniformly on board? It’s a question nationalizers have been loath to tackle because the answer is obvious (at least if you ignore that no level of centralized government is likely to maintain high standards and accountability): Washington. Only the federal government has the ability, by taking taxpayers’ money then offering it back with rules attached, to coerce all states into doing the same things. See, for instance, drinking ages. Or adopting the Common Core, which Washington got almost all states to do very quickly through the $4.35 billion Race to the Top program.

Ironically, it is perhaps because Common Core supporters have devoted huge amounts of their time and resources to denying that Washington had a major role in advancing the Core–a role they quietly called for–that may have caused them to miss the cracking in the tripod’s testing leg. Or perhaps they knew, because most states wouldn’t do so on their own, that they would need Washington to force states to adopt uniform tests, while understanding that openly stating that necessity would prove toxic to their cause. They knew that Americans, largely, do not want overt federal control over what their schools teach and how their kids are tested. So they continued to downplay the need to establish any sort of governing structure to keep their tripod together, lest simple logic make clear to the public that only Washington could accomplish what the standardizers need.

In other words, the need to stay hush-hush about the federal role–in order to protect national standardization–ultimately may be what kills it.