Good News from Iran

A variety of news outlets are reporting that Wilson Center scholar Haleh Esfandiari has been released from Evin prison “on bail,” and Reuters is reporting that Esfandiari’s lawyer, Nobel Laureate Shirin Ebadi, is stating that Esfandiari is now “legally allowed to leave the country.” Encouraging news.

Meanwhile, our thoughts and prayers are still with Kian Tajbakhsh, Ali Shakeri, Parnaz Azima, and their friends and families.

A Textbook Example of Government Failure

DCPS superintendent Michelle Rhee is doing a heroic job trying to get textbooks into classrooms by the start of school. One problem is that school officials still can’t tell her how many books they actually need. Classes start on Monday. 

Is the problem insufficient funding? As it happens, DCPS’s total gross budget for the last school year was upwards of one billion dollars according to its own website, and its enrollment was about 52,000 students. That means DCPS had total per pupil spending of nearly $20,000 last year, or half a million dollars per class of 25 students. You’d think that would cover books. 

The District’s perennial problem with getting books into students’ hands is a great illustration of what’s wrong with the status quo. When was the last time you walked into a Barnes and Noble or a Borders bookstore in mid August and didn’t see a well-stocked “back to school” display? Why is it so easy for them to handle inventory issues when they don’t even know how many customers they are going to have, while DCPS is flummoxed, year after year, despite having a fairly accurate enrollment number up front?  

The reason is simple: if you’re a bookseller, and you don’t have the books people want to buy on your shelves… they shop somewhere else. Keep that up for a few weeks or months and your bookshop is history. The reason DCPS can keep limping along despite doing such a poor job is that it doesn’t face real competition for that $20,000 per pupil per year in guaranteed funding. Sure, there are charter schools, but places there are limited. Sure, there’s a private school voucher program, but it’s even tinier. DC schools will start demonstrating the efficiency and quality of a competitive business when they start having to compete for the privilege of serving District children. Until then, it simply does not matter how intelligent or dedicated the superintendent happens to be. The central problem is the uncompetitive design of the system itself, not the people in it.

A Timely Reminder on Trade

From the Wall Street Journal’s ‘The Informed Reader’ blog today is a timely reminder that the stalled Doha round does not necessarily mean the end of trade liberalization efforts. According to the article, only 25 percent of tariff cuts between 1983 and 2003 were as a result of negotiated multilateral trade agreements. About 66 percent of tariff reductions came about from unilateral policy changes: from a recognition of the damage that tariffs do to one’s own economy through higher prices and lower productivity growth.

Unfortunately, there does not seem to be much political appetite for unilateral reductions in tariffs in the United States today (see here and here, for example) so a Doha agreement would have been welcome, to say the least. For one thing, subsidies (which are particularly prevalent in agricultural markets) are pretty much impossible to reduce on a bilateral or regional basis. But the expiration of trade promotion authority does not necessarily mean the end if lawmakers could get off the mercantalist bandwagon.

Get Rid of the National Weather Service

Because of technological advances, there is very little reason for taxpayers to shell out nearly $1 billion annually to finance a national weather service. As John Lott explains at Foxnews.com, private forecasters exist and (gee, what a surprise) they do a better job than government bureaucrats:

Despite dire predictions from the National Hurricane Center, no hurricanes hit the U.S. last year. …private weather forecasting companies predicted the threat to New Orleans well before the National Weather Service. In fact, AccuWeather issued a forecast that the hurricane would hit New Orleans 12 hours earlier than the government service. …It is not just for hurricanes that private forecasting comes out on top. A new study by Forecast Watch, a company that keeps track of past forecasts, found that from Oct. 1, 2006, through June 30, 2007, the government’s National Weather Service did very poorly in predicting the probability of rain or snow. Comparing the National Weather Service to The Weather Channel, CustomWeather, and DTN Meteorlogix, Forecast Watch found that the government’s next-day forecast had a 21 percent greater error rate between predicted probability of precipitation and the rate that precipitation actually occurred. In looking at predicting snow fall from December 2006 through February 2007, the National Weather Service’s average error was 24 percent greater. “All private forecasting companies did much better than the National Weather Service,” the report concludes.

The State Lives up to its Name

There’s a new report out arguing that even a modest school choice program in South Carolina that improved access to private schools would reduce the dropout rate and lead to significant savings for taxpayers. In covering that study, SC’s State newspaper tells us that

The dominant public education policy debate in the Legislature since 2004 has been whether the state can afford to provide incentives to parents who want to send children to private schools….

Two obvious implications of this sentence are that a school choice program would provide a net fiscal incentive for parents to choose private schools, and that it would add to the net cost of education in SC. Both are false.

At the moment, SC provides an enormous incentive for parents to choose public schooling over private schooling. It spends roughly $10,000 of compulsory tax dollars per pupil per year on families who choose public schools, and nothing on families who choose private schools. The tax credit programs that have been suggested in SC would only moderately reduce that existing incentive to choose public schools. The net financial incentive under such programs would STILL be to choose a public school, because the funding available per pupil would remain larger. 

And, as Clemson professor Cotton Lindsay’s fiscal analyses of the SC tax credit proposals showed (see here and here), the programs would actually have saved taxpayers money. Those reported savings, by the way, did not count the fiscal benefit of reducing the dropout rate, which was the subject of the recent State story. So, in fact, the total savings would likely be larger than Lindsay estimated.

Too much to ask that a newspaper called The State would correctly inform readers of these points?

Tax Code Industrial Policy

Millionaire football fans are among the beneficiaries of supposed emergency hurricane tax relief according to an AP report. The only positive aspect of this story is that the special tax breaks deprive politicians of extra money to waste (though they will continue to borrow and waste, so don’t get too excited). Actually, this corrupt form of tax-code industrial policy also has another positive attribute – it is an excellent example of why the internal revenue code should be junked and replaced with a simple and fair flat tax:

…federal tax breaks designed to spur rebuilding are flowing hundreds of miles inland to investors who are buying up luxury condos near the University of Alabama’s football stadium. About 10 condominium projects are going up in and around Tuscaloosa, and builders are asking up to $1 million for units with granite countertops, king-size bathtubs and ‘Bama decor, including crimson couches and Bear Bryant wall art. …And they intend to take full advantage of the generous tax benefits available to investors under the Gulf Opportunity Zone Act of 2005, or GO Zone, according to Associated Press interviews with buyers and real estate officials. …The GO Zone was drawn to include the Tuscaloosa area even though it is about 200 miles from the coast and got only heavy rain and scattered wind damage from Katrina. …The GO Zone investor tax breaks are credited with contributing to the condo boom in Tuscaloosa.