If You Like Goodness, You Should Love NCLB!

Yesterday, the Educational Testing Service (ETS) – which brings you the GRE, SAT, AP, and numerous other dreaded exams – released results of a survey supposedly showing that “Americans say ‘yes’” to reauthorizing the No Child Left Behind Act (NCLB). The ETS pollsters reached this conclusion despite finding that more respondents opposed NCLB than supported it. How’s that possible? It takes a little prodding.

The survey’s first major finding is actually that most people – more than half – report knowing very little about the massive No Child Left Behind Act. It also finds that a plurality dislikes the law, with 43 percent opposing it and only 41 percent backing NCLB. But an accurate snapshot of public knowledge and opinion apparently wasn’t what ETS was after. No, what they wanted to know was what people thought about the law after they were offered a brief – and very positive – description of NCLB:

The No Child Left Behind Act provides federal funds for school districts with poor children in order to close achievement gaps. It also requires states to set standards for education and to test students each year to determine whether the standards are being met by all students. In addition, No Child Left Behind provides funding to help teachers become highly qualified. It also provides additional funding and prescribes consequences to schools that fail to achieve academic targets set by their state.

What a shock! After respondents got that description, support for the law rose to 56 percent. Sort of like if the description were “NCLB fulfills champagne wishes and caviar dreams for every student in America.” I mean, who is going to oppose “highly qualified” teachers, closing achievement gaps, and helping poor children? If anything, it’s a testament to how disliked NCLB truly is that the description only boosted support by 15 points. And imagine how low support might have dropped had ETS offered a little balance by, say, noting that NCLB has caused many states to lower their standards, and has produced no discernable increase in academic achievement despite boosting federal education spending by billions of dollars. Yet one more example of why you should never trust public opinion polls.

Antigua and Barbuda Raises the Stakes

$3.4 billion. That’s the price tag Antigua and Barbuda, the island nation which successfully argued that the United States was violating its obligations to open its market to foreign online gambling providers, puts on its lost revenues as a result of the U.S. ban on some internet gambling. (More here and here.)

They are seeking to recover the money by withdrawing the protection they provide for American intellectual property (see here). The idea behind this sort of action is to harness the power of a powerful lobby group (in this case, Hollywood and the software industry) to counteract the influence of anti-internet gambling groups: If intellectual property owners are caught in the cross-fire of the dispute, maybe the United States government would feel more pressure to comply with the series of rulings against current U.S. regulations.

The push to seek compensation through the World Trade Organization comes just one day after the European Union has indicated it wants compensation for the loss of market access, but through further opening of other sectors in lieu of lifting the ban. When the United States announced last month that it was responding to their loss at the WTO by seeking to “clarify” its commitments, they indicated that they would not provide compensation to Members harmed by the ban, as is called for by WTO rules. The USTR had reasoned that since they never intended to allow internet gambling in the first place (suggesting that their commitment to do just that was an “oversight”), then Members could not expect to receive any sort of compensation in return for solidifying the ban.

We’re planning to hold a forum on this topic on 25th July. Stay tuned for details.

More Farcical Trade Remedies Cases at the ITC

The menacing trade remedies laws have done their share to breed cynicism about U.S. free trade rhetoric. But this greeting on the website of the most recent U.S. petitioner is apropos of the tone conveyed by those laws.

Pretty scary, huh? Not as scary as being an importer of Chinese-manufactured, off-road tires, nowadays.

Having been acquainted with that grizzly, you shouldn’t be surprised to learn that Titan Tires, one of the biggest American manufacturers of tires for agricultural machines, went on the offensive Monday, when it (along with several labor unions) filed petitions with the U.S. International Trade Commission and the Commerce Department for relief from allegedly subsidized and dumped import competition from China.

To win trade relief, Titan et. al. will need to demonstrate that the domestic industry is materially injured or threatened with material injury by reason of subsidized or dumped imports. It’s generally not very hard to satisfy the meager statutory thresholds for demonstrating injury, but what is so absolutely stunning to those naïve enough to expect a modicum of justice from the process is how petitioners can distort the truth with impunity before the ITC.

Although most of the crucial economic facts are redacted from the public version of this latest petition (which is accessible on the ITC’s website), here is a sample of the injury argument presented therein. From page 18:

As the table below shows, Titan’s domestic production, capacity utilization, shipments and employment data all demonstrate current material injury.

Then there is a table with the relevant data for the periods 2004-2006 redacted. Then, on page 19:

Titan’s financial data regarding its certain OTR tire operations also indicate the company is experiencing material injury.

 Then there is another table with the financial data redacted.

So how can one know, without seeing those numbers, that petitioners are taking liberties with the truth? Well, beyond the grizzly on Titan’s website is a list of SEC filings, in which the company presents an entirely different assessment of its performance and prospects. Here’s the annual report from 2006, and here are some excerpts:

The Company recorded sales of $679.5 million for 2006, which were 45% higher than 2005 sales of $470.1 million. The significantly higher sales level was attributed to the expanded agricultural product offering of Goodyear branded farm tires and the expanded earthmoving, construction and mining product offering of Continental & General branded off-the-road (OTR) tires… Income from operations was $22.0 million for 2006 as compared to $12.0 million in 2005.

So the company’s sales were 45 percent higher in 2006, and its operating profits were 83 percent higher. The company’s first quarter 2007 10-Q filing reveals continued revenue and operating profit growth in 2007.

Titan is also having difficulty keeping up with growing U.S. demand:

Due to capacity constraints at Titan’s Bryan, Ohio, OTR tire facility, the Company is adding OTR tire capacity at its Freeport, Illinois, and Des Moines, Iowa, facilities.

Capital expenditures for 2006, 2005 and 2004 were $8.3 million, $6.8 million and $4.3 million, respectively. Capital expenditures in 2006 were used primarily for updating manufacturing equipment, expanding manufacturing capacity and for further automation at the Company’s facilities. Capital expenditures for 2007 are forecasted to be approximately $16 million to $18 million and will be used to enhance the Company’s existing facilities and manufacturing capabilities including additional capacity for OTR tire production.

Adding production capacity is not typical behavior for a company that is under assault by injurious imports. Adding capacity to the tune of more than doubling the previous year’s capital investment reflects confidence in the company’s future prospects. And confident, Titan should be:

As of January 31, 2007, Titan estimates $171 million in firm orders compared to $122 million at January 31, 2006, for the Company’s operations.

Titan’s 2006 Annual Report also boasts that $100 invested in Titan in 2001 would have been worth $436.47 at the end of 2006, whereas the same investment in the S&P 500 index would have been worth $135.03. That is some very impressive performance.

Of course, contrasting the dire self-assessments of industries petitioning for trade relief with the upbeat assessments of industries seeking to attract investors has been a favorite pastime of trade remedies’ observers. It’s been a running joke within the international trade bar that lying to the SEC lands you in jail, while lying to the ITC lands you protection from foreign competition.

Who Should Ration Health Care?

In preparation for what should be a fun health policy forum on Thursday – hey, where are you going? – I’m reading Ezra Klein’s article “The Health of Nations” from the May issue of The American Prospect.  The article includes an interesting omission that might explain Klein’s preference for letting experts – rather than consumers – ration health care:

[T]he right…has argued for a move toward high-deductible care, in which individuals bear more financial risk and vulnerability. As the thinking goes, this increased exposure to the economic consequences of purchasing care will create savvier health-care consumers and individuals will use less unnecessary care…

Problem is, studies show that individuals are pretty bad at distinguishing necessary care from unnecessary care, and so they tend to cut down on mundane-but-important things like hypertension medicine, which leads to far costlier complications.

(Actually, cost-conscious patients also tend to cut down on health care that harms them.  That’s why the best evidence available indicates – contrary to what Klein suggests – that when patients control more of the money and do more of the rationing themselves, overall, it doesn’t harm their health.)

Later, Klein offers this explanation for his claim that Great Britain’s health care system is just as productive as the U.S. system, despite spending less than half as much on medical care:

Much of the health care we receive appears to do very little good, but we don’t yet know how to separate the wheat from the chaff. Purchasing less of it, however, doesn’t appear to do much damage.

So Klein acknowledges that neither individuals nor experts appear to do a good job of separating the wheat from the chaff.  Agreed.

But he appears to prefer rationing by experts, because he believes that when consumers make the necessary tradeoffs, they hurt themselves.  Except that this is not true overall – and it’s very hard to find evidence that supports an argument to the contrary.

So if Klein will acknowledge that letting consumers do the rationing does not lead to worse health outcomes – and I don’t see how he cannot – then why the preference for rationing by experts?

Nanny State Crackdown

Steve Kelly pokes fun at nanny state legislation.

Unfortunately, too many people have a “there ought to be a law” mentality.  Sometimes it is silly, but more often it is dangerous.  The Duke University case is a reminder that innocent lives can be adversely affected even if the criminal law were limited to violent offenses.   Expanding the criminal law is dangerous business.  Better to keep it limited–and keep a good eye on it. 

School Choice Movement Needs to Broaden the Coalition

A must-read article by Howard Rich*, chairman of the Parents in Charge Foundation, ran this weekend in the Wall Street Journal.  It explains why pursuing targeted voucher plans is a bad long-term strategy:

Broader choice plans equal broader support. You don’t have to take
Grassroots 101 to know that successful coalitions are based on
addition, not subtraction. Yet in many instances school choice
supporters have been conditioned to believe that confining the
parameters of parental choice will lead to a broader base of public
support. The opposite is true. As employee stock options and personal
savings accounts have shown, nothing motivates individuals quite like
becoming personally invested in an issue.

Supporters of school choice cannot afford to leave a single ally on
the sidelines – for Christian school parents, home school parents,
parents with special-needs children or parents who for whatever reason
aren’t satisfied with the public school they are zoned for, universal
choice plans offer a much broader base of grassroots support than more
narrowly-drawn proposals.

Rich should be commended for spearheading a new strategy in South Carolina that expands the school choice coalition and makes long-term success more likely.

Educational freedom for all is good policy and good politics.

* Howard Rich is also a Cato Institute Board member.