Tag: obama

Preschool’s Anvil Chorus

Act 2, scene 1 of Verdi’s opera Il Trovatore is marked by a lot Gypsy blacksmiths wailing away on their anvils. Sensibly enough, this has come to be called the “Anvil Chorus.” There is an equally clamorous chorus calling for universal federally-funded preschooling—one that president Obama may join this evening in his State of the Union address. It should be called the Anvil Chorus, too, because if it is successful it will tie an anvil ‘round the neck of early education and American taxpayers.

The trouble with federal-government-funded preschooling is that we have 47 years of experience with it … and it doesn’t work. The federal Head Start pre-K program was created in 1965, and despite decades of concerted efforts to refine and improve it it has virtually no measurable effects that last to the end of the third grade—or even the first. And of the very few and modest effects that have been found at the end of the third grade, some are actually negative. That is what federal government pre-K has accomplished with $200 billion and half a century of effort. Is that a sensible basis for expanding federal government pre-K?

Those large-scale randomized studies of Head Start are not the only indication that federal government spending on pre-K (and K-12) programs is ineffective. We can also look at the performance gap, at the end of high school, between the children of high school dropouts and those of college graduates. This is the key gap—between children in advantaged and disadvantaged families—that federal compensatory education programs set out to close in 1965. Below is a chart I prepared just a few years ago, documenting that gap using the reading section of the best national data set available (the “Long Term Trends” series of the National Assessment of Educational Progress). The results are equally disappointing in math and science (see Figure 20.5, here).

Nor should we be surprised by the failure of federal pre-K-through-12 programs to narrow this gap—they have failed just as badly in their other aim of improving overall student achievement, as the following chart of federal spending and student achievement at the end of high-school reveals.

Overcome by the sound of their own chorus, universal federal pre-K advocates are deaf to this evidence. For the sake of the children they seek, ineffectually, to help, let’s hope they are unable to fasten their anchor around the necks of current and future generations of taxpayers.

The ‘New Normal’ of High Unemployment

I almost feel sorry for the Obama administration’s spin doctors. Every month, they probably wait for the unemployment numbers from the Bureau of Labor Statistics with the same level of excitement that people on death row wait for their execution date.

This has been going on for a while, and today’s new data provide another good example.

As the chart below indicates, the White House promised that the unemployment rate today would be almost 5 percent if we enacted the so-called stimulus back in 2009. Instead, the new numbers show that the jobless rate is 7.9 percent, almost 3.0 percentage points higher.

Obama Unemployment

I enjoy using this chart to indict Obamanomics, in part because it’s a two-fer. I get to criticize the administration’s economic record, and I simultaneously get to take a jab at Keynesian spending schemes.

What’s not to love?

That being said, I don’t think the above chart is completely persuasive. The White House argues, with some justification, that these data simply show that they underestimated the initial severity of the recession. There’s some truth to that, and I’ll be the first to admit that it wouldn’t be fair to blame Obama for a bleak trendline that existed when he took office (but I will blame him for continuing George W. Bush’s policies of excessive spending and costly intervention).

That’s why I think the data from the Minneapolis Federal Reserve are more damning. They show all the recessions and recoveries in the post-World War II era, which presumably provides a more neutral benchmark with which to judge the Obama record.

Obama’s Stark Vision of the World

Charles Krauthammer zeroes in on the stark worldview expressed in President Obama’s inaugural address:

Obama is the apostle of the ever-expanding state. His speech was an ode to the collectivity. But by that he means only government, not the myriad of voluntary associations — religious, cultural, charitable, artistic, advocacy, ad infinitum — that are the glory of the American system.

For Obama, nothing lies between citizen and state. It is a desert, within which the isolated citizen finds protection only in the shadow of Leviathan. Put another way, this speech is the perfect homily for the marriage of Julia — the Obama campaign’s atomized citizen, coddled from cradle to grave — and the state.

“Nothing lies between citizen and state.” Exactly. That’s why Obama can say things like

No single person can train all the math and science teachers we’ll need to equip our children for the future. Or build the roads and networks and research labs that will bring new jobs and businesses to our shores.

Well, of course not. No one thinks a single person could. It takes many people, working together. But even Krauthammer misses the point that it takes businesses, coordinated by prices and markets. Krauthammer correctly chides Obama for thinking that collective action means only the state and not voluntary associations. But most of our needs are met, most of our progress is generated, by neither the state nor charities.

We are fed, clothed, sheltered, informed, and entertained by individuals, working together with other individuals, mostly in corporations, with their activities coordinated by the market process. As I’ve said before, libertarians “consider cooperation so essential to human flourishing that we don’t just want to talk about it; we want to create social institutions that make it possible. That is what property rights, limited government, and the rule of law are all about.”

What kind of a bleak worldview is it that can look at the bounty provided by business enterprises and charitable associations and see a barren wasteland enlightened only by the activities of the federal government? President Obama’s worldview, apparently. And Hillary Clinton’s.

My further thoughts on Obama’s collectivist speech in this 10-minute audio podcast.

Obama, Barbara Walters, and Marijuana Users

In an interview with Barbara Walters, President Obama was finally asked about the dramatic legal changes underway in Colorado and Washington–the legalization of marijuana for adults under state law.  The President said that the federal government has “higher priorities” than arresting marijuana users.   At first glance, that may seem like a good answer for those supportive of drug policy reform, but it is not.

Here’s why: Arresting marijuana users has never been a high priority of federal law enforcement.  There are about 800,000 marijuana arrests in the U.S. every year.  The feds are responsible for about 1% of those.  The feds rely on state and local police to conduct domestic drug investigations–especially users with small amounts.  The feds want to focus their resources on the big international cartels operating outside the country.  Of course, the DEA also gets involved with the larger smuggling operations inside the U.S.  In California, where marijuana is quasi-legal for users (in a de facto sense) federal prosecutors focus on the supply side–raiding, harassing, arresting.  The feds bypass  juries by using civil asset forfeiture laws against persons opening dispensaries.

Against that background, listen again to Obama: My administration has higher priorities than going after marijuana users.  Hmm.  That’s just another way of saying “nothing has changed as far as I’m concerned.”    I expect Attorney General Eric Holder to announce a legal challenge to the Colorado and Washington initiatives sometime soon.  And federal raids will begin soon also.

Cato hosted an event this week on some of the issues related to such a federal legal challenge.  Speakers included, former DEA chief, Asa Huthinson and Robert Mikos, Vanderbilt law professor and author of a new Cato study about the interplay between federal and state law with respect to marijuana.

Bloomberg: ObamaCare Doubling Premiums for Individuals & Firms Spurs Talk of Delaying Rollout

Bloomberg reports:

Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna Inc. (AET)’s chief executive officer said.

While subsidies in the law will shield some people, other consumers who make too much for assistance are in for “premium rate shock,” Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.

“We’ve shared it all with the people in Washington and I think it’s a big concern,” the CEO said. “We’re going to see some markets go up as much as as 100 percent.”…

Premiums are likely to increase 25 percent to 50 percent on average in the small-group and individual markets, he said, citing projections by his Hartford, Connecticut-based company.

Industry analyst Robert Laszewski comments:

[F]or the vast majority of states there will be rate shock.

I can also tell you that, so far, I have detected no serious effort on the part of Democrats to delay anything. Frankly, I think hard core supporters of the new health law and the administration are in denial about what is coming.

I expect more health insurers to be echoing the Aetna comments in coming weeks.

Education Poll Exposes Moochin’ Americans

As we slide towards the “fiscal cliff,” President Obama’s stance seems pretty clear: Americans want lots of stuff but shouldn’t have to pay for it. (It’s a position the GOP has also often taken.) A new education survey suggests the President’s position is politically smart.

According to the poll, commissioned by the pro-spending Committee for Education Funding, 55 percent of respondents thought “education programs” should be spared automatic budget cuts, third behind Medicare (69 percent) and “tax credits for low-income families” (58 percent). That’s not surprising, since most people are rationally ignorant – how many have the time or inclination to delve into the minutiae of health, education, and tax policy?  – and assume that spending on good-sounding things must be, well, good. That rampant rent-seeking and bureaucratic inefficiency squanders the dough probably isn’t something of which many are aware.

From a moral standpoint this isn’t hugely troubling, though one would hope that people would care much more about effects than intentions. What is quite troubling is that while many Americans think education is crucial and should be spared cuts, it seems they aren’t willing to pay for it themselves. 55 percent of respondents thought education should be protected from sequestration, but only 45 percent said they would “definitely” or “probably” be willing to pay more taxes to do it. And odds are respondents were much more willing to say they would accept higher taxes than they would be to support concrete efforts to actually get them.

So who, if anyone, should pay? While the survey isn’t crystal clear on that – indeed, there is much wiggle room throughout the findings – at least one indication is “the rich.” When given the (false) choice of either cuts to federal programs or tax increases for “those with incomes over $250,00 per year,” 58 percent chose the latter.

It’s hard to fault people for not knowing the depressing outcomes of federal programs that purportedly promote good things.  It is not so difficult to fault them for saying that other people should pay for the initiatives they think are so dandy.

It seems there’s a fair amount of moochin’ goin’ on.

Exposing Washington’s Dishonest Budget Math

I’ve repeatedly tried to expose pervasive fiscal dishonesty in Washington.

In these John Stossel and Judge Napolitano interviews, for instance, I explain that the crooks in DC have created a system that allows them to claim they’re cutting the budget when the burden of government spending actually is rising.

This sleazy system is designed in part to deceive the American people, and the current squabbling over the fiscal cliff is a good example. The President claims he has a “balanced approach” that involves budget cuts, but look at the second chart at this link and you will see that he’s really proposing bigger government.

This dishonest approach also was used by the President’s Fiscal Commission and last year’s crummy debt limit deal was based on this form of fiscal prevarication.

Here are some key excerpts from a Wall Street Journal editorial exposing this scam.

…President Obama and John Boehner are playing by the dysfunctional Beltway rules. The rules work if you like bigger government, but Republicans need a new strategy, which starts by exposing the rigged game of “baseline budgeting.” …numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s “baseline” has automatically increased spending every year according to Congressional Budget Office projections, which means before anyone has submitted a budget or cast a single vote. Tax and spending changes are then measured off that inflated baseline, not in absolute terms. …Democrats designed this system to make it easier to defend annual spending increases and to portray any reduction in the baseline as a spending “cut.” Chris Wallace called Timothy Geithner on this “gimmick” on “Fox News Sunday” this week, only to have the Treasury Secretary insist it’s real. …in the current debate the GOP is putting itself at a major disadvantage by negotiating off the phony baseline. …If Republicans really want to slow the growth in spending, they need to stop playing by Beltway rules and start explaining to America why Mr. Obama keeps saying he’s cutting spending even as spending and deficits keep going up and up and up.

You probably won’t be surprised to learn that other nations rely on this crooked system, most notably the United Kingdom, which supposedly is imposing “savage” cuts even though government spending keeps rising (and they fooled Paul Krugman, though he seems to make a habit of misreading foreign fiscal and economic data).

But let’s return to the American fiscal situation. Republicans almost certainly will lose the battle over the fiscal cliff because they meekly are playing cards with a rigged deck controlled by the other side.

They should expose this scam by using nominal numbers and looking at year-over-year changes in both taxes and spending. I did that last year and showed how simple it is to balance the budget in a short period of time.

They key thing to understand is that (barring a recession) tax revenues rise every year. Indeed, the Congressional Budget Office projects that tax revenue will climb by an average of more than 6 percent annually over the next 10 years - even if the 2001 and 2003 tax cuts are made permanent.

So all that’s really needed to bring red ink under control is a modest bit of spending restraint. This video is from 2010, but the analysis is still completely relevant today.

It’s amazing how good things happen when you follow the Golden Rule of fiscal policy.