Tag: New York Times

Politics and Politicians

The New York Times, which wants politicians to run everything from our schools to our health care to our retirement, has lately been telling us just what kind of people it wants us to trust with our lives. People like mayoral candidate Bill Thompson:

As a first-time candidate for New York City comptroller, William C. Thompson Jr. was feted at a downtown fund-raiser in 2001 by two luminaries of the black business world: the hip-hop mogul Russell Simmons and Mr. Simmons’s money manager, a veteran Wall Street financier who made his fortune promoting hybrid securities known as convertible bonds.

Speaking in between rap and poetry-slam performances, the financier, Tracy V. Maitland, made clear why he had taken an interest in the little-watched race for comptroller. “When you control $85 billion,” he told 200 guests crowded into a popular art gallery, “you get a lot of attention.”

Over the last 12 years, Mr. Thompson has repeatedly gotten Mr. Maitland’s attention.

After that fund-raiser, Mr. Maitland became a regular contributor to the campaigns of Mr. Thompson, a Democrat who is now running for mayor. Later, he pushed unsuccessfully for Mr. Thompson’s wife to be hired as president of the American Society for the Prevention of Cruelty to Animals, where he is a trustee.

Mr. Maitland’s attention was not unrequited. In 2006, Mr. Thompson honored him at a Black History Month observance. And in 2008, his office for the first time began investing city pension assets in convertible bonds, pouring $324 million into Advent Capital Management, the firm Mr. Maitland founded. By the time Mr. Thompson left office, in 2009, Advent was earning $2 million a year in fees on those investments.

Mr. Thompson’s ties to Mr. Maitland reflect a pattern that emerges from an examination of Mr. Thompson’s stewardship of the pension funds and, more broadly, the comptroller’s office: Again and again, Mr. Thompson reaped political gains from those he awarded city business.

As he oversaw the city’s $85 billion pension system, Mr. Thompson steered the funds into a diverse range of new investment categories, expanding from heavy concentrations in stocks and bonds into private equity, real estate and niche funds. Yet performance was lackluster: nationwide, more than half of large public pension funds outperformed the five city funds’ combined 4.84 percent return from 2002 through 2009, according to a widely used yardstick compiled by Wilshire Associates, an investment advisory firm. Meanwhile, the city’s roster of fund managers, and their fees, tripled — and Mr. Thompson collected more than $500,000 in campaign donations from them.

Mr. Thompson’s credentials as comptroller and a seasoned manager are central to his mayoral campaign, in which he has portrayed himself as the grown-up in the Democratic field — less liberal, strident and showy, but best prepared for the sober task of managing an unruly city.

But interviews and a review of thousands of pages of records — schedules, e-mails, pension statements and campaign finance reports — suggest frequent overlap of Mr. Thompson’s political ambitions and the comptroller’s operation, and that like many pension overseers at the time, he raised campaign money aggressively from those seeking business from his office.

And his opponent Bill DeBlasio:

California Officials Deliberately Mislead Public on Obamacare Rate Shock

Ever since Obamacare became law, I have been counseling states not to establish the law’s health insurance “exchanges,” in part because:

to create an Exchange is to create a taxpayer-funded lobbying group dedicated to fighting repeal. An Exchange’s employees would owe their power and their paychecks to this law. Naturally, they would aid the fight to preserve the law.

California was the first state both to reject my advice and to prove my point.

Officials operating California’s exchange–which the marketing gurus dubbed “Covered California“–recently and deliberately misled the entire nation about the cost of health insurance under Obamacare.

They claimed that health plans offered through Covered California in 2014 will cost the same or less than health insurance costs today. “The rates submitted to Covered California for the 2014 individual market,” they wrote, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

See? No rate shock. California’s top Obamacare bureaucrat, Peter Lee, declared his agency had hit “a home run for consumers.” Awesome!

Unfortunately, anyone who knows anything about health insurance or Obamacare knew instantly that this claim was bogus, for three reasons.

  1. Obamacare or no Obamacare, health insurance premiums rise from year to year, and almost always by more than 2 percent. So right off the bat, the fact that Covered California claimed that premiums would generally fall means they’re hiding something. 
  2. Obamacare’s requirement that insurers cover all “essential health benefits” will force most people who purchase coverage on the “individual” market (read: directly from health insurance companies) to purchase more coverage than they purchase today. This will increase premiums for most everyone in that market.
  3. Obamacare’s community-rating price controls (also known as its “pre-existing conditions” provisions) will increase premiums for some consumers (i.e., the healthy) and reduce premiums for others (i.e., the sick). So it is misleading for Covered California to focus on averages because averages can hide some pretty drastic premium increases and decreases.

“Everyone Will Have to Decide For Themselves”

Alessandro Acquisti is one of my favorite privacy researchers, and a quote he gave the New York Times about consumer privacy is all Acquisti, right down to the Italian-born locution.

“Should people be worried? I don’t know,” he said with a shrug in his office at Carnegie Mellon. “My role is not telling people what to do. My role is showing why we do certain things and what may be certain consequences. Everyone will have to decide for themselves.”

Alas, Times reporter Somini Sengupta did not report on Acquisti as neutrally as Acquisti reports on privacy.

We don’t always act in our own best interest, his research suggests. We can be easily manipulated by how we are asked for information. Even something as simple as a playfully designed site can nudge us to reveal more of ourselves than a serious-looking one.

It is just as plausible that people mouth a desire for privacy but then act more consistently with their self-interest when they reveal information that provides them fuller interaction, free Internet content, and broader commercial choices.

Read more of Acquisti on his Economics of Privacy page.

War Is Too Easy, but a Draft Is Not the Solution

In yesterday’s New York Times, Thomas Ricks penned an op-ed calling for the draft to be reinstituted. Ricks offers that under his plan for military conscription, libertarians who object could opt out provided they don’t partake of Uncle Sam’s other goodies such as federally subsidized mortgages, Medicare, and college loans. As a libertarian who objects to a draft, but who also received an NROTC scholarship in exchange for an active-duty commission, I think that Ricks is offering conscientious objectors a raw deal.

Those opting out, of course, could not refuse to pay the taxes that are used to fund government programs. That would be great for the government—compel people to pay for services that they will never use—but it is profoundly unfair, especially to young adults.

Mr. Ricks’s plan will certainly cost more money than our current all-volunteer force, especially in the near term. For example, we can expect tuition to skyrocket as soon as college administrators realize that the taxpayers are on the hook to pay for these new conscripts’ secondary education. The long-term savings that Ricks anticipates from changes to the military retirement are likely to prove equally elusive; past attempts to rein in costs for military retirees, including changes to eligibility rules, have repeatedly failed. There are sensible ideas for fixing the problem, but the politics are still really tough.

A draft is unlikely to save us money, but it will certainly abridge young people’s freedom. It is unfair to older adults, too, who would see their taxes rise. To add insult to injury, many older adults would see their tax dollars go to pay low-wage workers who would then be competing with them for jobs. Mr. Ricks thinks it’s outrageous that a 50-year old janitor earns $106,000 a year, plus overtime; the janitor would disagree. Others who would suddenly be forced to compete with a taxpayer-funded horde of 18-year olds include day care providers, nurses, and construction workers.

Libertarians want minimal government, as Mr. Ricks claims, but his plan would dramatically expand government power, abridge individual liberty, and distort the labor market. Despite his claims that this will be beneficial to the economy, economists long ago concluded that the all-volunteer force is superior to conscription. Conscription is a superficially great deal for the government, but a net loss for the taxpayer and draftee in hidden costs, and lost freedom.

I am sympathetic to Mr. Ricks’s desire to avoid rushing headlong into other foolish wars. It is too easy for the United States to wage war and send resources—drones, special operations forces—to low-level conflicts. Congress has abdicated its responsibility to declare war and deficit spending kicks the monetary costs down the road. But the draft is not the answer. Instead, let’s begin our search for a solution by forcing the advocates for such wars to a higher standard of proof, and holding them accountable when their rosy predictions of quick success prove erroneous.

Cross-posted from the Skeptics at the National Interest.

NYT Channels Monty Python’s Black Knight

America’s growing school choice movement is a bridge to educational freedom—an escape from our failing state school monopolies. And with all the tenacity (and veracity) of Monty Python’s Black Knight, the New York Times stands athwart that bridge, declaring: “None shall pass.”

The Times’ latest attempt to parry the thrust for educational freedom is this story attacking education tax credit school choice programs: “Public Money Finds Back Door to Private Schools.” No doubt this story has legs…but not for long.

Let’s begin with the title, which claims that private donations to private scholarship organizations are “public money” because they qualify for a tax credit. It’s a simple claim that is simply not true. As has been recently reported:

the genius of [tax credit programs] was that the money would never go into public accounts, making it less susceptible to court challenges…. As predicted, tax credits have thus far withstood legal challenges, most recently when the Supreme Court upheld Arizona’s program last year.

Perhaps the editors of the NYT were simply unaware of the report above—and unaware of the Supreme Court decision it cites (ACSTO v. Winn) explicitly stating that tax credited donations are not public money. But here’s the thing, the quote above is actually from the same story on which the Times slapped the “Public Money…” headline. So either the NYT’s editors don’t read their own stories, or they’re knowingly presenting a false statement to their readers in big, bold type. I can understand someone not wanting to read the NYT every day, but surely they’ve managed to find editors willing to do so?

Next, let’s talk about the story’s lede….

This is where a paper puts the bit that they expect to rouse the most reader interest or indignation. What we have is an anecdote about a single Georgia scholarship granting organization (SGO) that just might be allocating donations in a way that donors would not approve of. But here’s the thing: there are a lot of different SGOs. If you decide that you don’t like the way one SGO is using your donations… you can stop donating to it. You can then look at other SGOs to find one you think is well run. You can even stop donating to SGOs entirely if you don’t find a single one that meets your standards. The system is quite responsive to the donor/taxpayer’s concerns.

Now let’s compare that to the status quo in America, under which every taxpayer must pay for the state school monopoly in their area regardless of its performance, efficiency, or institutional ethics. How’s that workin’ out? Since we’re talking about Georgia, surely it’s relevant to bring up the epic cheating scandal that exploded in the Atlanta Public School District less than a year ago. The Georgia Bureau of Investigation found that 178 teachers and administrators had systematically defrauded children of an education by falsifying the students’ state test sheets to make it look as though they were really learning. Can taxpayers cut off their funding to the district? No. Can they expect swift and complete justice? Nope. Even though 82 of the perps had already confessed last July, only one had been fired as of 8 weeks ago.

So which system is better equipped to deal with inevitable human frailties; the one that lets donors pull funding as soon as they have the first hint of concern, or the one that they have to keep funding no matter how suffused with corruption it becomes? Hmm?

Next, the Times demonstrates remarkable cruelty to animals by trotting out the rhetorical jade that we live in a “time of deep cutbacks in public schools.” Perhaps they felt safe making this claim knowing that the federal government’s education statistics are usually 3 or more years out of date, and hence don’t cover the most recent years of our economic downturn. If so, they must have thought no one would give credence to the up-to-date numbers published by a well-known private organization: nominal public school spending increased every single year between 2001-02 and 2011-12—both in the aggregate and per-pupil. Even after the Great Recession, even after adjusting for inflation, we’re still spending 10.6% more per pupil than we were when we had just crested the tech boom back in 2001-02. What right-wing group came up with these astonishing numbers? Was it the left’s current bête-noire, ALEC? Actually, it was the N. E. A.

Finally, some paragraphs into the piece, the Times comes up with a concern that almost has merit: some private schools that serve scholarship-receiving students have a pedagogical emphasis that some taxpayers might disagree with. The examples offered are sports and religion, but many others could no doubt be suggested. And a strong case could be made that taxpayers in a free society should not be compelled to pay for the teaching of ideas they find objectionable. In fact, such a case was already made over two hundred years ago by Thomas Jefferson, who wrote that “to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves… is sinful and tyrannical.” That quote comes from the Virginia Act Establishing Religious Freedom, enacted in 1786 and subsequently used as the model for state constitutional clauses all over the country banning such “compelled support.”

So why do I say that the Times’ concern “almost” has merit? Because it doesn’t apply to education tax credits. No one is compelled to support any SGO, and those who do choose to make a donation get to select the SGO that receives their money. What the Times seems not to have realized is that this concern actually does apply to… the public school system it is trying so ineptly to defend. Taxpayers’ options under state schooling are to keep funding the system or go to jail, but it is not hard to imagine that some taxpayers may disbelieve the ideas taught by public schooling. Consider the story from just a few days ago about the public school teacher who taught her students that they could be arrested for speaking ill of the President. Or consider the Times’ evident disdain for private schools that focus on sports to the perceived detriment of academics. No one has to fund such schools under an education tax credit system, but we all have to fund them under the government monopoly status quo. Is this news (that didn’t fit) to the New York Times?

Next, the Times laments that SGOs cost money to operate. “Hundreds of thousands of dollars… in some cases”! Let’s say, for the sake of argument, that you are a fiscal hawk just like the New York Times, and that you’re desperately concerned about the efficiency with which your education dollars are spent. Which system should you prefer, tax credits or the public school monopoly? As it happens, Florida’s k-12 scholarship tax credit is raising academic achievement at less than half the per pupil cost of the traditional state-run schools.

According to a statistical study commissioned by the Florida legislature and authored by David Figlio, students accepting scholarships to attend private schools under the state’s tax credit program enjoy improved academic achievement. According to a second study co-authored by Figlio and Cassandra Hart, the program also improves achievement of students who remain in public schools [see previous link].

Of course the Times story mentions that Figlio has studied Florida’s tax credit program… but it doesn’t report what he found. Apparently, a significant positive academic impact is not relevant to a NYT education story if it comes from a program outside the control of the state monopoly school system. Print readers are left entirely in the dark about these facts. The online NYT version of the article links to a .pdf file of one of the studies without comment, but even the subset of Web readers who take the time to click through and read it will only get half the story. Those who read the Times’ story on other on-line sites that lack links won’t get even that.

But what of the charge that “some of the programs have become enmeshed in politics.” Even coming from the NYT this line of argument is difficult to believe. Has it not occurred to them that state schooling has been soaking in politics since its inception? Are they unaware that the public school employee unions—whose funding comes entirely from compulsory taxation—spend more on federal politics than Chevron, Exxon Mobil, the NRA, and Lockheed Martin combined? Or that between 93 and 99 percent of those political contributions have gone to Democrats? Surely they must be aware of news coverage like this:

 If unions are the Democratic Party’s base, then teachers’ unions are the base of the base. The two national teachers’ unions — the American Federation of Teachers and the larger National Education Association — together have more than 4.6 million members. That is roughly a quarter of all the union members in the country. Teachers are the best field troops in local elections. Ten percent of the delegates to the 2008 Democratic National Convention were teachers’ union members.

But then again, maybe they haven’t read it. After all, it ran in the New York Times Magazine.

Against public schooling’s multi-generation legacy of arch political partisanship, the Times complains that businesses might endear themselves to politicians by… helping poor kids get a good education. They present no evidence of an illegal quid pro quo—just the haunting specter that someone in political office might be gratified if a business helps kids learn. They have it precisely backwards. The real problem is that there are so many in political office who would not be gratified by such an act, because their own political lives depend on teachers’ union donations coercively squeezed out of taxpayers thanks to the government-protected monopoly on k-12 schooling.

Years ago, we were told that the legacy media were distinguished by their “multiple layers of fact checking”. This NYT article, like most NYT articles on education, is certainly comprised of multiple layers of something… but it doesn’t smell like fact checking.

From Cybercrime Statistics to Cyberspying

Someone finally decided to examine “cybercrime” statistics, and here’s what they found:

The cybercrime surveys we have examined exhibit [a] pattern of enormous, unverified outliers dominating the data. In some, 90 percent of the estimate appears to come from the answers of one or two individuals. In a 2006 survey of identity theft by the Federal Trade Commission, two respondents gave answers that would have added $37 billion to the estimate, dwarfing that of all other respondents combined. This is not simply a failure to achieve perfection or a matter of a few percentage points; it is the rule, rather than the exception. Among dozens of surveys, from security vendors, industry analysts and government agencies, we have not found one that appears free of this upward bias.

That’s Dinei Florêncio and Cormac Herley of Microsoft Research in a New York Times piece entitled: “The Cybercrime Wave That Wasn’t.”

You see, cybercrime statistics have been generated using surveys of individuals and businesses, but you can’t generate valid numerical results that way. An opinion poll’s errors will naturally cancel out—there are a roughly equal number of wrongly stated “thumbs-up”s and “thumbs-down”s.

When you ask people to estimate losses, though, they can never estimate less than zero, so errors will always push results to the high side. High-side errors extrapolated society-wide drive the perception that cybercrime is out of control.

There are more drivers of excess insecurity than just bad loss estimates. There are also data breach notification laws, which require data holders to report various kinds of personal data spillage. These reports are the high-tech, grown-up version of a favorite schoolyard taunt: “Your epidermis is showing!” Epidermis is, of course, a scientific name for skin. It often doesn’t matter that one’s epidermis is showing. The questions are: What part of the epidermis? And what social or economic consequences does it have?

Most breached data is put to no use whatsoever. A 2005 study of data breaches found the highest fraudulent misuse rate for all breaches under examination to be 0.098 percent—less than one in 1,000 identities. (The Government Accountability Office concurs that misuse of breached data is rare.) Larger breaches tend to have lower misuse rates, which makes popular reporting on gross numbers of personal data breaches misleading. Identity frauds are limited by the time and difficulty of executing them, not by access to data.

Why does excess cyber-insecurity matter? Doesn’t it beneficially drive companies to adopt better security practices for personal data?

It undoubtedly does, but security is not costless, and money driven to data security measures comes from other uses that might do more to make consumers better off. More importantly, though, data breach agitation and distended crime statistics have joined with other cybersecurity hype to generate a commitment in Congress to pass cybersecurity legislation.

Cybersecurity bills pending in both the House and Senate could have gruesome consequences for privacy because of “information sharing” provisions that immunize companies sharing data with the government for cybersecurity purposes. The potential for a huge, lawless cyberspying operation is significant if anyone can feed data to the government free of liability, including the privacy protections in property law, torts, and contract. Congress would not improve things by regulating in the name of cybersecurity, and it just might make things a lot worse.

It is ironic that overwrought claims about cybercrime and data breach could be privacy’s undoing, but they just might.

Randy Barnett and the Health Care Overhaul

Cato senior fellow Randy Barnett is featured on the front page of today’s New York Times as the chief academic critic of the constitutionality of the 2010 health care law. He spoke at Cato on that topic last Friday; video here.

The article notes his longstanding interest in the Ninth Amendment, the subject of his book published by Cato and the George Mason University Press in 1989, The Rights Retained by the People: The History and Meaning of the Ninth Amendment.

Professor Barnett also cooperated with Cato on his most recent book, Restoring the Lost Constitution: The Presumption of Liberty.

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