I’m in Pajamas

Over at PajamasMedia today, I address the recent handwringing about the competitiveness of American workers. Legions of pundits, legislators, and business leaders have warned us that foreign competition compels us to improve our schools. But after selling us on the power of competition to drive the pursuit of excellence, do these good folks actually suggest introducing the “C” word to the school system itself? Do they seem aware, as a new Cato book illustrates, that market forces work as well in education as in other fields? Er… no.

Stop by and share your thoughts (they have a comment section).

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Starving College Students? Yeah, Right!

Read almost any news story about the price of college, and it will no doubt start with a heart-wrenching tale of some student who works approximately 3,000 hours a week, takes six classes, and has no idea how he’ll afford to pay tuition. Such human-interest hooks are great for grabbing readers’ attention, and certainly there are some students who struggle to pay for college. The problem is, these ubiquitous tales of woe have convinced many Americans that constant, on-the-edge subsistence is the plight of most college students, and that only copious amounts of taxpayer-financed aid — which itself helps drive rampant tuition inflation — can save them.

And then there is the other side of the story: all the money spent by college kids not on the basics, but creature comforts and extravagances that if he were transported to the present day would make yesteryear’s college student choke on his cafeteria mystery meat. From today’s Inside Higher Ed:

As she did her usual move-in day sweep of residence halls, Kathy B. Hobgood, director of residence life at Clemson University, noticed students in a dozen or so rooms unpacking their flat-screen televisions items that until recently might have been spotted in a campus café but certainly not in a dorm.

Up and down the halls, people piled their electronic gadgets on top of storage cubes and dishware, leaving behind a monumental trail of cardboard and packing foam.

“The volume of stuff is alarming,” says Hobgood, who is publications coordinator for the Association of College and University Housing Officers International. “This pile of boxes … you wouldn’t believe.”

Housing directors all over — and not just in places that tend to attract wealthy students — are reporting an increase in the number of belongings students bring with them to college. Carloads, they say, are becoming the norm.

Of course, one might say that tales of flat-screen TV’s and designer dorm furniture are as anecdotal as starving student stories. And one might be right. Some data in the Inside Higher Ed article, however — and in the survey linked to within — strongly suggests that student luxury is far from restricted to a few Richie Riches:

Back to college has become big business. According to an annual survey from the National Retail Federation, students and their parents are spending $5.43 billion this season on dorm and apartment furnishings, up from $3.82 billion a year ago. The survey shows that they will spend a combined average of $956.93 per student on back-to-college merchandise, up from last year’s $880.52.

According to the data, it certainly seems that a large number of college kids aren’t struggling just to survive. Indeed, it seems many aren’t wanting for anything at all.

Perhaps, though, hard statistics aren’t enough for you. Here, then, is one more heart-wrencher to help kill the starving student myth. It’s the Princeton Review’s vaunted — and infamous — list of the nation’s top-20 party schools, which, with one exception, contains all state — meaning directly taxpayer subsidized — universities.

Party on, “starving” students!

Pregnancy as a Random Occurrence

In 2004, the American College of Obstetricians and Gynecologists tried to get California’s legislature to require consumers who purchase their own health insurance to buy coverage for … wait for it … the services of obstetricians and gynecologists.

The following comes from an analysis of the failed legislation that is available on the California Senate’s web site:

In response to the suggestion that mandated coverage for maternity care will promote adverse selection, ACOG asserts that empirical evidence shows women cannot accurately predict when they will become pregnant, and therefore would not be able to time a purchase of insurance with an expected birth.

Healthcare Economist Critiques My P4P Article

Thanks to Jason Shafrin for sharing his thoughts on my article, “Pay-for-Performance: Is Medicare a Good Candidate?

Shafrin points to a problem with my preference for (I must apologize in advance for all these modifiers and hyphens) privately administered third-party pay-for-performance financial incentives:

Cannon’s point of using competition between insurers to allow each to experiment is wise assuming that insurers want the best care for their patients. As Dr. Fogoros notes in his GUTHealtcare website, patients generally do not pay for their health insurance, employers do. And for employers “As long as we don’t hear more than the average number of complaints from our employees, the health coverage we provide is, by definition, good enough.”

True enough: insurers and employers are not always good agents for employee-patients. In the Medicare setting, however, seniors can choose a private “Medicare Advantage” plan themselves – that is, they are not assigned to a plan by an employer. So in Medicare Advantage, there may be more competitive pressure for private insurers to get P4P right.

They’re Laughing in Texas

I realize the death penalty should be a serious topic, with thoughtful people trying to balance the value of deterrence against the risk of wrongful execution. But incredulous laughter was my first reaction when I read the report in the EU Observer that European politicians are hectoring Texas to suspend the death penalty. I’m not sure it would be possible to make the death penalty even more popular than it already is in the Longhorn Lone Star State, but I strongly suspect that Euro-nagging could overcome the laws of mathematics and push support for executions to more than 100 percent:

The European Union has strongly criticised death penalties carried out in Texas, calling on its authorities to halt the 400th execution in the US state. In a statement released on Tuesday (21 August), the Portuguese EU presidency said the bloc viewed with “great regret” the upcoming executions and urged Texas Governor Rick Perry to halt them and consider a moratorium on the death penalty. …” Commenting on the EU’s appeal to call off his death sentence, Governor Perry replied that it would be a “just and appropriate” punishment for the murderer. “Texans long ago decided the death penalty is a just and appropriate punishment for the most horrible crimes committed against our citizens,” his spokesman told the BBC. “Two hundred and thirty years ago, our forefathers fought a war to throw off the yoke of a European monarch and gain the freedom of self-determination,” he pointed out, adding “While we respect our friends in Europe, Texans are doing just fine governing Texas.”

UPDATE: A reader reminds me, “Texas is the Lone Star State, not the Longhorn State (except to certain partisans of the University of Texas).” I guess I watch too much college football.

Summoning the Ghosts of Smoot and Hawley

Members of the 110th Congress haven’t been shy about expressing their disdain for trade. No fewer than two dozen trade-related bills, almost all of which are antagonistic toward U.S. trade partners or outright protectionist, were introduced in the first seven months of this Congress. While some of those bills were crafted mostly for political effect, it is pretty clear that some hostile trade legislation will at least make it to the floors of both chambers this session or next. With Congress adjourned for August recess, here’s where things stand.

For all intents and purposes, the completed bilateral trade agreements with South Korea, Colombia, Peru, and Panama have been shunted aside to consider, instead, enforcement-oriented legislation and the expansion of trade adjustment assistance legislation. Although House Ways and Means Committee Chairman Charles Rangel of New York has stated his intention to promote the Peru Agreement, it is doubtful that he will take to the task with much vigor or any success. His colleagues have different plans for trade policy.

Consider the names of some of the bills before Congress: The Trade Prosecutor Act; The Trade Enforcement Act; The Trade Law Reform Act; The Japan Currency Manipulation Act; The Balancing Trade Act; The Trade Adjustment Assistance Improvement Act, and the still-nameless legislation that would revoke normal trade relations status for China. Implicit in all of this: trade liberalization is bad, our trade partners cheat, and the folly of our embrace of globalization is evidenced by its massive human toll.

The Chinese “currency issue” has dominated trade discussions on the Hill. In the Senate, the currency bill most likely to make it to the floor is S.1607 (the Baucus-Grassley-Schumer-Graham Bill). It requires the Treasury Department to issue semiannual reports on the currencies of our trade partners, with action triggered against countries whose currencies are found to be fundamentally misaligned. If a currency is designated as such (and the country has been tagged for “priority action” because its central bank has engaged in “protracted, large-scale” exchange market intervention with partial or full sterilization) the country would have 90 days to take corrective measures. If insufficient measures are taken on the part of the offending country, a series of actions by the U.S. government would be triggered.

Most problematically, the bill mandates that all subsequent antidumping calculations (for products that are subject to antidumping measures) would require the conversion of foreign prices into U.S. dollars using the rate of exchange that would be observed if the currency weren’t misaligned. It is still unclear how the “would be observed” rate would be determined, but it’s crystal clear that such actions would be found to violate the WTO Antidumping Agreement.

If after one year, the currency is still misaligned, the legislation mandates the U.S. Trade Representative to lodge a formal complaint within the WTO. Again, it’s unclear which provision of the WTO agreements would be violated by the action or inaction of the foreign government.

The House’s currency bill contains similar provisions, but is more aggressive and more problematic. It would treat currency misalignment as an export subsidy, and mandates application of countervailing duties to offset those “subsidies.”

But currency isn’t the only topic on the congressional trade agenda. They’re thinking enforcement and reparations, too.

The Trade Adjustment Assistance Improvement act would broaden the scope for compensating workers and communities adversely affected by import competition. Financial assistance would be made available to primary and secondary service workers who can demonstrate that they lost their jobs to outsourcing.

On August 1, Senate Finance Committee Chairman Max Baucus of Montana introduced S.1919, The Trade Enforcement Act of 2007, which is a bill that consolidates his favorite provisions from the various stand-alone bills introduced earlier in the year. Among other things, it would:

  • create a Chief Enforcement Officer at the USTR to identify, investigate, and prosecute cases where trade partners are not in compliance with their obligations;
  • establish a panel of retired federal judges to review adverse WTO decisions, and to advise Congress on the efficacy of those decisions before any steps toward compliance are undertaken;
  • eliminate presidential discretion to not impose tariffs or quotas recommended by U.S. International Trade Commission in so-called China Safeguard cases;
  • eliminate presidential discretion to not apply the countervailing duty law to so-called non-market economies;
  • lower the evidentiary threshold for finding “material injury” in antidumping cases, which would encourage the initiation of more antidumping cases.

In the House, the inclination toward mischief is even greater than in the Senate. While versions of most of the provisions specified in S.1919 exist in various House bills, there is also legislation that would reverse U.S. implementation of a prior WTO ruling regarding the antidumping calculation practice known as zeroing. There are also provisions in the Trade Law Reform Act that would result in the calculation of higher antidumping duties by the Commerce Department.

There seems to me a huge inconsistency in all of these provisions. On the one hand, it says, let’s beef up our enforcement and prosecutorial capacity and bring more WTO cases. On the other hand, it says, let’s enact provisions that are likely WTO-inconsistent, and while we’re at it, show defiance of the WTO by affirming our belief that its rulings are beneath us. In other words, Congress wants to rely on the WTO to compel other countries to act in accordance with their commitments, while Congress decides on a case- by-case basis whether such WTO rulings against U.S. policies have merit.

This Congress, more than any in my lifetime, is apt to upset the apple cart in ways we may regret for years to come.

Cracking the Code on “Villainous” School Choice

Yesterday, over at The Huffington Post, education blogger Dan Brown – no relation to The Da Vinci Code’s author – posted a little homage to Democratic presidential candidates who have repudiated the No Child Left Behind Act (NCLB), toned down calls for teacher merit pay, and declared that all educators should be paid more. In other words, Mr. Brown praised candidates who boldly offered the same old, failed, “more money, thank you,” approaches to education reform we’ve been taking for decades. (NCLB is directly from that mold, but that’s not why Brown objected to it.) Indeed, Brown wrote that any presidential candidate who touted such bankrupt ideas is “inherently a champion of social justice.”

The absurdity of such over-the-top accolades, of course, deserves criticism. More galling, though, is how Brown characterized reforms that would lead to actual, transformative change:

If a candidate abdicates his responsibility to public education by offering superficial band-aids, or even worse, villainous profit-driven proposals like vouchers and privatization, then his true colors are seen.

“Villainous” school choice? Oh, come now, Mr. Brown! Advocating policies that have kept millions of poor kids trapped in bad schools while spending ever-greater sums of taxpayer money and protecting even atrocious teachers is the pinnacle of nobility, but parent-empowering school choice is villainous? It’s evil to let parents and children out of jail by enabling them to make their own educational decisions, but enlightened to keep them locked up and pay their jailers more?

One might not like school choice, but calling it villainous? Such dramatic, black-and-white characterizations might work for the other Dan Brown, but when it comes to educational reality, they just don’t make any sense.