Tag: Nevada

What if We Ran a Public School System… and No-One Came?

The New Jersey Office of Legislative Services, which estimates the budgetary impact of proposed laws, has just released its analysis of a private school choice bill called the “Opportunity Scholarship Act.” The most remarkable thing about its report is the amount of money it assumes that districts would save for each student they no longer have to teach: $0.

On that assumption, if every student were to leave for the private sector tomorrow, districts would keep right on spending exactly the same amount they spend today. Inefficient though it is, not even state-run monopoly schooling is that bad.

The OLS report does not explain why it assumes that the per pupil savings for students leaving public schools (the “marginal cost”) would be $0. It states that this figure is “indeterminate,” but by not counting it at all is effectively treating it as zero.

In fact, the marginal cost of public schooling is not “indeterminate” at all. Economists “determine” it all the time, and it’s quite easy to do. You simply observe how district spending actually rises and falls with enrollment, using a time-series regression, as I did in 2009 to calculate the marginal cost of public schooling in Nevada (see Appendix A).

Even if the NJ OLS does not conduct a marginal cost estimate specific to New Jersey, they could have done–and should still do–the next best thing: take the marginal cost estimates for other states as a rough guide and estimate the NJ district savings from them. I estimated that Nevada district spending falls by 85% of average per-pupil spending when a student leaves, and Grecu and Lindsay, a couple of years earlier, estimated the figure at 80% for South Carolina.

If they want to be conservative, the NJ OLS could use the lower of these figures, and perhaps also run the numbers for estimates 10% higher and 10% lower.

Any of the above options is preferable to the logical impossibility of their current analysis, which effectively treats the marginal cost of public schooling as $0.

Senator Reid’s Gamble

My colleague Dan Mitchell has already written about the tax deal reached between President Obama and congressional Republicans.  But there might be something in the package for people wishing to play poker freely online.

Sen. Harry Reid (D., Nev.) is apparently circulating draft legislation to overturn the Unlawful Internet Gambling Enforcement Act of 2006, which blocked financial institutions from processing transactions with online gambling companies.  I would characterize that as a good move overall, apart from three quibbles. First, the draft legislation would – you guessed it –place a tax on the wagers (you didn’t think you’d get your freedom back without conditions, did you?). Second, the bill applies only to poker, and continues to prohibit “Internet gambling” more broadly. And third, the fine-print sounds problematic from a trade policy (and trade law) point of view:

…Mr. Reid’s office is considering language that would allow only existing casinos, horse tracks and slot-machine makers to operate online poker websites for the first two years after the bill passes, which could limit the ability of other companies to enter the market.

Carving out this fast-growing market for established gambling service providers sets off my protectionist alert. The cosy little cartel wouldn’t just exclude domestic potential competitors; I wrote a short paper a few years ago on how the UIGEA got the United States into hot water with the World Trade Organization, and the same arguments apply today. The United States still – despite vague, and so far empty, talk about changing its commitments with WTO members – has an obligation under the General Agreement on Trade in Services to open its market to online gaming operators abroad.

Politico has more about the groups supporting this move, suggesting (as are many Republicans opposed to internet gambling) that Reid has seen religion on online poker in direct response to the campaign contributions he received from gambling interests. I’m not so much interested in that angle –politicians responding to special interests is hardly news – as I am in the substance of what the legislation is proposing. And if the following reporting from Politico is accurate, the substance is troubling enough :

The National Indian Gaming Association is opposing Reid’s effort to insert the online poker language in any tax cut bill, said an official with the group, Jason Giles. He asserted it gives an advantage to Las Vegas-based gambling operators while discriminating against tribal operators.

“It is drafted to create an initial regulatory monopoly for Nevada and New Jersey for the first several years of the bill, which gives Las Vegas operators time to capture the market,” he said.

A gambling industry insider familiar with Reid’s efforts said Republican-leaning Vegas casino moguls Steve Wynn and Sheldon Adelson, while generally supportive of Reid’s legislation, take issue with provisions that could allow companies that previously operated in violation of online gambling laws to cash in.

The UIGEA is/was a nightmare for online operators to work around, partly because it never really defined “unlawful internet gambling.” Therefore, I am not sure how one would determine unambiguously whether a company “operated in violation of online gambling laws”.  The UIGEA referred to transactions processors rather than gambling companies. And in any case, a few European operators (PartyGaming most famously) withdrew from the U.S. market at the time the UIGEA passed, just to be safe, and yet have continued to face prosecution.  The European firms are at the cutting edge of online gaming services. Of course Messrs. Wynn and Adelson would want them out of the picture, but legislators should resist their attempts.

While Reid’s proposal may be an improvement on the status quo, it falls far short of restoring the full freedom of consenting adults to use their money, time, and online access in a manner of their choosing. It also is a long way from allowing a competitive, open market in gaming services to thrive. We should see this as a step in the right direction, but not the end game.

The Moocher Index

The Center for Immigration Studies recently put out a study arguing that immigration has had negative effects on California. One of their measures was a comparison of how many people in the state were receiving some form of welfare compared to other states. I found that data (see Table 3 of the report) very interesting, but not because of the immigration debate (I’ll leave others to debate that topic). Instead, I wanted to get a better understanding of the variations in government dependency. Is there a greater willingness to sign up for income redistribution programs, all other things being equal, from one state to another? The “all other things being equal” caveat is very important, of course, since the comparison produced by CIS may simply be an indirect measure of the factors that determine welfare eligibility. One obvious (albeit crude) way of addressing this problem is to subtract each state’s poverty rate to get a measure of how many non-poor people are signed up for income-redistribution programs. Let’s call this the Moocher Index.

A few quick observations. Why is Vermont (by far) the state with the largest proportion of non-poor people signed up for welfare programs? I have no idea, but maybe this explains why they elect people like Bernie Sanders. But it’s not just Vermont. Four of the top five states on the Moocher Index are from the Northeast, as are six of the top nine. Mississippi also scores poorly, coming in second, but many other southern states do well. Indeed, if we reversed the ranking and did a Self-Reliance Index, Virginia, Florida, and Georgia would score in the top 10. Nevada, arguably the nation’s most libertarian state, is the state with the lowest number of non-poor people signed up for welfare.

Let’s now emphasize several caveats. I’m not an expert on the mechanics of social welfare programs, but even I know that eligibility is not governed solely by the poverty rate. Indeed, some welfare programs are open to people with much higher levels of income. This means that a more thorough analysis at the very least would have to include some measure of income distribution by state. Moreover, states use different formulas for Medicaid eligibility, so this index ideally also would be adjusted for state-specific policies that make it easier or harder for people to become dependent. There also are some states (and even colleges) that actually try to lure people into signing up for welfare, which also might affect the results. And I’m sure there are many other factors that are important, including perhaps immigration. If anybody knows of substantive research in this area, please don’t hesitate to share material.

Nevadans Don’t Want REAL ID, but the DMV Does, and That’s What Matters

Via the ACLU’s Blog of Rights, a temporary measure Governor Jim Gibbons put in place to bring Nevada into compliance with REAL ID has expired, and the legislature does not plan to renew it.

But the Nevada DMV wants it. The Las Vegas Review-Journal reports, “the DMV will seek legislative approval to implement the new licensing system at least by May 1, 2011.”

I wonder if the DMV will donate to candidates that support REAL ID, or perhaps campaign against legislators that don’t. Maybe it should just start voting in elections. The gall of these bureaucrats, telling the legislature what to do.

REAL ID Continues Its Long, Slow Failure

REAL ID continues its long, slow failure. The federal government’s national ID plans continue to bash against the shoals of state and popular opposition.

Late last month, the governor of Utah signed H.B. 234 into law. The bill prohibits the Utah driver license division from implementing REAL ID. That brings to 25 the number of states rejecting the national ID law, according to the Tenth Amendment Center.

And the State of Nevada, one of the few states that had been working to get in front of REAL ID, is reconsidering. With wait times at Las Vegas DMVs reaching two to four hours, the legislature may soon allow a temporary REAL ID implementation measure signed last year to lapse—this according to the Ely (NV) News.

Congress has attempted to circumvent the growing state opposition to REAL ID with the now-stalled PASS ID legislation. It basically would rename REAL ID so as to nullify the many state resolutions and laws barring implementation of the national ID law because they refer to the May 2005 “REAL ID” law specifically. But PASS ID is the same national ID, it has all the privacy issues of REAL ID, and its costs would be as great or greater than REAL ID.

That doesn’t mean national ID supporters in Congress won’t try to sneak the REAL ID revival bill into law sometime later this year, of course …

Symbols, Security, and Collectivism

The state of Nevada is one of few that is tripping over itself to comply with the REAL ID Act, the U.S. national ID law.

It’s worth taking a look at the sample license displayed in this news report, especially the gold star used on the license to indicate that it is federally approved.

The reasons for “improving” drivers’ licenses this way are complex. The nominal reason for REAL ID was to secure the country against terrorism. The presence of a gold star signals that this the card bears a correct identity and that watch-list checking has ensured the person is not a threat.

Don’t be too thrilled, though. The weakness of watch-listing was demonstrated again by the Christmas-day attempt on a Northwest airlines flight. The underpants bomber wasn’t listed, so checking his name against a watch-list didn’t do anything.

The real reason for REAL ID, though, was anti-immigrant fervor. If the driver licensing system distinguished between citizens and non-citizens, the theory goes, possession of a driver’s license can be used to regulate access not just to driving, but to working, financial services, health care, and anything else the government wants. Illegal presence in the country could be made unpleasant enough that illegal immigrants would leave.

Alas, human behavior isn’t that simple. If ‘driven’ to it—(I had to…)—people will get behind the wheel without licenses—and without the training that comes with licensing. Then they’ll crash. When the governor of New York briefly de-linked driver licensing and immigration status in 2007, he cited public safety and the likelihood that insurance rates would fall, to the benefit of New Yorkers. (When the state of New Mexico de-linked driver licensing and immigration status, uninsured vehicle rates in the state dropped from 33 percent to 17 percent.) But the governor suffered withering criticism from anti-immigrant groups and quickly reversed course.

Like linking immigration status and driving, linking immigration status and work through an ID system imposes costs on the law-abiding citizen. Complications and counterattacks raise costs on workers and employers while reducing the already small benefits of such programs. I articulated those in my paper on employment eligibility verification.

REAL ID transfers well-being and wealth from individuals to the state.

But let’s return to this gold star…

The article says that the Nevada ID is becoming one of the hardest in the country to forge. But it’s hard to be sure. The gold star may undermine the anti-forgery goal.

Forgery is the making or altering of a document with the intent to defraud or deceive. The question is not whether the whole document can be made—I’m sure the new Nevada license is bristling with security doodads—it’s whether a document can be made to deceive.

Watch for the people who check licenses to fall into the habit of checking the gold star and taking that as evidence that the document is “good.” By a small but relevant margin, ID checkers will forget to compare the picture on the license to the face of the person presenting it. (Gold star? Go.) Putting a gold star on the license may make forgery easier. It’s not about the technical feasibility of creating the card; it’s how to fool people.

But this gold star. It will be taken as a shorthand for “citizen.” There are examples from the past in which governments used symbols to assign status to populations. It’s easy to go overboard with such comparisons, but the Nevada license, with this gold star, takes a dramatic step toward carving the population into groups—groups that can be divided. Maybe soon two stars will be for military veterans, or people licensed to own firearms. Three stars could be for elected officials.

With this gold star system, a Nevada license-holder is a little less of a free, independent person with rights and privileges based on individual merit. A Nevadan becomes an undifferentiated status-holding subject. We’re a long way from the day when the “gold star” people are assigned to better rail cars, but the idea is that it should never happen. We should reject entirely the tools that could allow the government to do that.

Anti-Sex School for Johns?

In a novel approach to punishing men who attempt to hire prostitutes, Nashville and other cities are sending first-time offenders to a one-day class where they learn from former prostitutes, health experts, psychologists and law enforcement officers about “the risks of hiring a prostitute.”

This is a waste of time.

Prostitution is “the oldest profession” for a reason: sex is a biological imperative. A day of anti-sex school will have no effect on the demand for prostitution.

The better approach is to legalize.

Under legalization, the vast majority of men would patronize legal establishments. This would also allow quality control, since competition would encourage prostitution services to certify their employees as free from STDs and above the age of consent. Legalization would help the women who serve as prostitutes by reducing the violence they suffer from johns and pimps. In particular, legalization would mainly eliminate forced prostitution.

The claim that prostitution encourages sexual assault does not pass the sniff test. Many countries, plus Nevada and Rhode Island, allow legal prostitution to varying degrees, but no evidence suggests they have a higher incidence of violence toward women.

C/P Libertarianism, from A to Z