Alaska Will Not Implement REAL ID

Passed into law Wednesday:

Section 1. AS 44.99 is amended by adding a new section to article 1 to read:

4 Sec. 44.99.040. Limitation on certain state expenditures. A state agency may not expend funds solely for the purpose of implementing or aiding in the implementation of the requirements of the federal Real ID Act of 2005 (P.L. 109-13, Division B).

High Wire

I recently received a complimentary copy of Peter Gosselin’s new book,  High Wire: The Precarious Financial Lives of American Families.   Mr. Gosselin is the national economics correspondent for the Los Angeles Times.  Here is an excerpt from the book jacket:

 The recent downturn seems to have brought an end to some of the strongest, smoothest growth in American history–a performance that economists found so sweet they dubbed it the “Great Moderation.”  Yet even in boom times, the economy was caught in a cross-current. … [T]he cross-current was neither the product of a misapprehension nor the nation’s normal ups and downs.  Instead, it was the result of a quarter-century long conversion of the nation’s economy from one of checks and balances to barely tempered free markets.

Interesting.  Query: What baseline (pdf) is Mr. Gosselin using?

“Dog Bites Man” Passes for Legal News These Days

“The Supreme Court this week made big news because it hardly changed the law at all,” reports The Washington Post. “The court broke no new ground in deciding that workers are protected from retaliation for complaining about discrimination, just as they are protected from discrimination itself.”  The story goes on to quote part of this press release that I wrote yesterday:

The Gómez-Pérez and Humphries rulings reinforce what should be readily apparent to objective Court-watchers: The Roberts Court is neither necessarily “pro-business” nor “conservative.” Instead, the Court evaluates the legal merits of each case and rules accordingly. Even where the Chief Justice disagreed with his colleagues (and notably with an opinion written by Justice Alito), in the Gómez-Pérez case, the disagreement was a technical one over statutory language and structure – and not anything that involves judicial philosophy or competing theories of constitutional interpretation. The most interesting thing to note from these cases is the difference in the justices’ views of stare decisis, the principle that the Court places heavy weight on its own precedent. Whereas Chief Justice Roberts and Justice Alito (and perhaps others) no doubt disagreed with the precedent upon which the Humphries decision relied, they went along with Justice Breyer’s reasoning that such disagreement over statutory interpretation does not justify overturning precedent. Justices Scalia and Thomas, on the other hand, consider that the risk to legal stability from overturning precedent to be less than the harm from perpetuating the earlier error. Whatever the significance of this difference of opinion, it is not an ideological dispute.

Perhaps more importantly, as I (and apparently others) said to this reporter over the phone, Roberts and Alito are likely to be more accommodating of incorrect but established precedent when they pertain to statutory interpretation rather than constitutional rights.  This is because Congress can always itself “overrule” an erroneous body of statutory construction by passing a new law – but of course the Court has the final word on constitutional issues (barring a constitutional amendment).

More generally, though, the above analysis, relating as it does to technical statutory construction that only reinforces existing law, would not normally be front-page (or, in this case, page A2) news.  The nature of the cases to which the Roberts Court grants review, however – more technical, business issues instead of red-meat “culture war” stuff – suggests that we could be in for more “dog bites man” stories in future.

The Global Flat Tax Revolution

There’s good news and bad news in the world of tax policy. The good news is that a growing number of nations now have flat tax systems instead of so-called progressive tax schemes that punish people for contributing more to economic growth. The bad news is that the United States is conspicuously absent on the list of flat-tax jurisdictions. Defenders of the internal revenue code often argue that a flat tax is an impractical idea, but this new video (narrated by yours truly) demonstrates that the flat tax is working very well and spreading rapidly as nations compete to offer more attractive tax policy to the world’s investors and entrepreneurs.

One small correction is already necessary. The video states that there are 24 flat tax jurisdictions, but it has recently been shown that Trinidad & Tobago is now a member of the flat tax club. Hopefully, the list will grow rapidly and the video will quickly be outdated.

Surprise! Stadium Predictions Flawed

The Washington Examiner reports:

Attendance at Nationals Park has fallen more than a quarter short of a consultant’s projections for the stadium’s inaugural year, cutting into the revenue needed to pay the ballpark bonds and spurring a D.C. Council member to demand the city’s money back.

The District’s ability to pay down the debt on the publicly financed ballpark depends in part on the number of people who show up to the games, David Catania, independent at-large, wrote in a letter Tuesday to Chief Financial Officer Natwar Gandhi. 

A study was commissioned in 2005 by Gandhi’s office. Written by Los Angeles-based Economics Research Associates, the report predicted attendance at the 41,000-seat ballpark would average 39,130 in year one, dropping to 32,737 in year four.

But paid attendance through 28 games has averaged only 29,141, Catania said, 26 percent lower than the consultant’s estimates. The Nationals are drawing the 15th-best crowd in baseball, according to ESPN, with a team that is in last place in the National League East and a 22-31 record as of Wednesday.

“It appears now,” Catania wrote, “that ERA may have seriously overestimated ticket sales, which represents a major portion of stadium-related revenues.”

Gandhi says it doesn’t matter, the bonds can be paid off with attendance as low as 10,000 per game. Which raises the question: if it’s that easy to pay for the stadium, why didn’t the multi-millionaire team owners agree to pay for it themselves?

Of course, these economic projections for subsidized stadiums are always vastly overstated. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed stadium subsidy, “The wonder is that anyone finds such figures credible.”

Several Cato studies over the years have looked at the absurd economic claims of stadium advocates. In “Sports Pork: The Costly Relationship between Major League Sports and Government,” Raymond Keating finds:

The lone beneficiaries of sports subsidies are team owners and players. The existence of what economists call the “substitution effect” (in terms of the stadium game, leisure dollars will be spent one way or another whether a stadium exists or not), the dubiousness of the Keynesian multiplier, the offsetting impact of a negative multiplier, the inefficiency of government, and the negatives of higher taxes all argue against government sports subsidies. Indeed, the results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports — or a possible negative effect.

In Regulation magazine, (.pdf) Coates and Humphreys found that the economic literature on stadium subsidies comes to consistent conclusions:

The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city.

And in “Caught Stealing: Debunking the Economic Case for D.C. Baseball,” Coates and Humphreys looked specifically at the economics of the new baseball stadium in Washington, D.C., and found similar results:

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

And yet millionaire owners and mayors with Edifice Complexes keep commissioning these studies, and council members and editorial boards keep falling for them.

Broad-Minded Failure

Mark Lampkin, Executive Director of ED in ’08, about which I wrote on National Review Online last week, has responded to my piece with a letter to the editor. Apparently, my explanation for why reform efforts within the current system are largely futile, and fundamentally altering the system is the key, was “narrow-minded.” It makes one wonder what’s so broad minded about leaving in place the hidebound, nearly reform-proof government monopoly we currently have, but let’s get to some specifics in Lampkin’s letter.

Lampkin begins with this, which is really the crux of our debate:

McCluskey’s arguments underestimate the severity and urgency of our education crisis and naively bypass the difficult political terrain surrounding education reform. We agree that the system is broken, but we disagree with his suggestion that we should forestall desperately needed reform of the current system.

Now, I don’t think I underestimate the severity of our education problems—I assure you that the day I start saying our system isn’t a shambles is the last day you’ll see me writing on this blog—though I do think Lampkin and Co. tend to overhype national economic threats and education’s ability to negate them. Our real disagreement is on the ability of proposed reforms of the current system to do real, lasting good.

Lampkin seems to assume that ED in ‘08’s proposed reforms will somehow be alive, kicking, and transforming our schools tomorrow if we’ll only hearken back to Nike’s old slogan and “just do it,” while choice and competition are on a much longer timeline:

Choice and competition are very important ingredients in any effort to improve our schools, but we also need a more immediate response to implement a realistic and achievable set of solutions.

It sounds funny to use terms like “immediate” and “realistic” regarding an education system where everyone seems to have a five-year plan that is replaced every third year with someone else’s five-year plan, and in which the No Child Left Behind Act has a twelve-year, full-proficiency timeline almost no one thinks is realistic. It sounds funny, because it is funny. In fact, it might be crazy: Talking about “immediate,” meaningful changes in hugely bureaucratic, politicized, government-run public schooling, is about as grounded in reality as my assuming I’ll wake up tomorrow morning with my male-pattern baldness transformed into rocker-pattern abundance.

Look at this in the context of ED in ‘08’s big goals.

After laying out his basic beef with my piece, Lampkin argues for uniform, national standards—preferably benchmarked to the standards of “the best performing nations in the world”—instead of the “hodge-podge of 50 states with 50 different standards.” 

Perhaps Lampkin didn’t re-read his entire letter when it was done, because all by himself he offers sufficient evidence that our public schools are nearly incapable of real reform to make my case for me. Start with this: State K-12 systems, though they differ from each other in some relatively minor ways, are all top-down monopolies. They also have something else in common:

Currently, no state benchmarks their standards against the best performing nations in the world and many do not even set standards high enough to meet the basic level of achievement on the National Assessment of Educational Progress (NAEP). A Department of Education study found that out of 32 states, none had set performance benchmarks for fourth-grade reading that were high enough to meet the proficient level on NAEP and 24 states had set them so low they did not reach even the most basic level.

So out of 50 states—each with the same basic governing structure—not one has apparently come close to the ED in ‘08’ ideal. You might think the common governing structure had something to do with it, a centralized, highly bureaucratic, special-interest-dominated structure that would become even more centralized were Washington or a consortium of states to establish a single standard for everyone. You’d be right, as the next example will make even more clear.

ED in ‘08’s next major goal is getting “effective teachers in every classroom.” In my piece, I identified this as a nice rhetorical goal, but one just about anyone doing anything related to education offers. Lampkin suggests that this was an unfair caricature and that unlike most people, Ed in ‘08’ is actually “talking about ways to get and keep these effective teachers in the classroom,” including merit pay and competition.

I suggested that ED in ‘08’s effective-teachers goal hardly seemed new because, well, it doesn’t seem new, and I was trying to explain why ED in ’08 is having little success at putting education on the presidential election map. And merit pay? While a nice idea that might help a little, discussion of it is far from new and hardly unique to Lampkin’s group. It will also be of very limited value without school choice even if enacted because money won’t flow to the schools with the best teachers, allowing them to get paid more.

But what’s the tie-in between effective teachers and my overall point that the current system can’t be reformed? Here’s Lampkin:

Unfortunately, often politically potent teachers unions often thwart efforts to reform teacher pay and tenure. In Washington, D.C., new Chancellor Michelle Rhee has met extreme resistance in her efforts to fire ineffective teachers and administrators, yet the District has consistently scored at the bottom of national assessments. Even New York City’s Chancellor Joel Klein, although somewhat successful in implementing performance pay, has decried the difficulty in implementing accountability measures for teachers and culling deadwood.

So even two of the hottest within-the-system reform spots—New York City and Washington—have seen efforts to infuse competition in their labor forces largely thwarted by teachers unions.

How did the unions get such power? Government monopoly, that’s how! By their nature unions are strongest when they can control an entire industry’s workers and negotiate with just one authority, which is why they are very strong in the public sector and near death in the private. They are also political juggernauts because teachers’ livelihoods come from the political system that employs them, giving them huge incentives to be heavily involved in politicking, lobbying, and just plain dominating the school system that’s supposed to be serving not them, but children and parents. And since children can’t even vote, and parents who have full-time jobs and lots of other concerns can’t possibly organize with sufficient political force to defeat the unions, the unions succeed in killing most meaningful in-system accountability and reform.

So what’s ED in ‘08’s solution to the problem? Have the federal government “partner with states to promote and support state and local programs that work,” writes Lampkin. Again, this solution sounds like rhetoric, but that’s not its biggest flaw. Its biggest problem is the underlying assumption that the teachers unions won’t have outsized influence over a federal system just as they have in most state systems. But the National Education Association has been campaigning for more federal involvement in education since before it was ever a teachers union, and the unionized version almost single-handedly established the U.S. Department of Education. Centralizing the system a little more is the opposite of a solution on teacher quality—and almost everything else that smacks of real standards or accountability—because it is likely to empower unions first and foremost.

Finally, Lampkin argues that extended learning time—longer school days and/or years—has been implemented in traditional public school districts just as in the KIPP charter schools I mentioned in my piece. Lampkin notes that Massachusetts has a pilot program for expanded learning time that appears to have paid dividends in at least one district.

My point in discussing KIPP—whose co-founder was a  panelist at the ED in ‘08 event I was writing about—was not to say that it is impossible for some districts or even states to enact longer days or years, but it is much harder than for autonomous schools. Why? Because politics controls traditional public schooling, and as one of the other panelists mentioned (I think it was Joel Klein, but I’m not sure) it was much easier for KIPP to extend their year than regular public schools because they didn’t have to get the approval of non-education interests like the tourism industry.

Once again, politics nearly destroys reform within the current system, whereas autonomous schools chosen by parents can move quickly. Which is the main point: A system based on top-down government control is almost impervious to change because the people whose behavior we want to alter control the system. Parental choice and independent schools, in contrast, lead to a system that can and must respond quickly to parents and children—the people the schools are supposed to serve—because when schools don’t, the customers simply take their money elsewhere. And this is not just theoretical. As I noted in my piece, the superiority of freedom over socialism—which is what American public schooling really is—can be seen not just in KIPP, but the opening economies of China and India, the heavy use of private education in other nations, and the still-too-small but fast-growing school choice programs in states across the country. Of course, there’s also the fall of the Soviet Union, the consumer electronics industry, automobiles, package-delivery services….

All of this brings me back to Lampkin’s most baffling assertion: that my critique of ED in ‘08’s inside-the-box reforms, and my championing of putting power in the hands of parents instead of government, is “narrow-minded.” As a matter of definition this makes little sense—how is trying something new narrow minded?—but if giving up on a demonstrably broken, reform-impervious system is indeed narrow minded, then may my mind never measure more than a micron in width.