I Thought the Schools Were Starving?

Everyone knows that our public schools are underfunded, right? So why do they keep blowing easy money?

You might recall that last week the Miami-Dade School District turned down a principal’s offer to work for a single dollar on the grounds that the district would have to put his salary in the budget anyway. Good bye, $119,999! Today, The Seattle Times reports that the state of Washington is forfeiting a $13.2 million grant for Advanced Placement teachers because the people running the grant program want to pay teachers directly for participating in their training. The problem? “Washington’s collective-bargaining laws require that teacher pay be negotiated between unions and school districts.”

Our public schools, no matter what bureaucrats and unions tell us, are not underfunded. If they were, though, the whiners would largely have themselves to blame.

Genuine Unsolicited Testimonial for Cato University

Bill Eilberg, a Club for Growth member who attended Cato University last year, sent this review into the Club blog:

I’m not one who easily sits through lectures, but at Cato University, I can honestly tell you that my attention span was at its highest level, as I listened more intently than I ever had done in college or law school.

I note that Rob McDonald is on the faculty again this year. Rob is one of the most talented speakers one will ever hear. His discussions on American history are positively riveting. I will never forget listening to his poignant account of how George Washington quelled a potential revolt by his officers, taking out his reading glasses to quote from a text (it is a story you may have heard already, but Rob is a master at retelling it). If I had the opportunity, I could listen to him for hours.

Bill is certainly right. Cato University gets rave reviews every year. Once again this July, it will be held at the beautiful Rancho Bernardo Inn near San Diego. Speakers will include Tom Palmer, Peter Van Doren, Gene Healy, and Michael Cannon of Cato. Reporting from around the world will be former Putin adviser Andrei Illarionov, German economist Karen Horn, elcato.org editor Gabriela Calderon, and Zimbabwean opposition leader Rejoice Ngwenya. And reporting from 1776, the aforementioned Professor McDonald.

Sign up now.

Florida Education Tax Credit Cap Raised

Florida lawmakers struck a deal (.pdf) to raise the cap on the state’s scholarship donation tax credit program by $30 million dollars last Friday, the last day of the legislative session. Under the program, businesses that donate to nonprofit scholarship organizations for poor children can claim a tax credit for the value of the donation. For the past seven years, these scholarships have been bringing private schooling within reach of families that couldn’t otherwise afford it.

But while the legislature has raised the cap on donations, that doesn’t meant the program will expand automatically. In order for the program to grow, more low income parents have to ask for the scholarships, and more businesses have to choose to make donations. The program is completely voluntary. So far, the interest definitely seems to be there: the program doubled in size over the past three years, to nearly 20,000 children.

Scholarship tax credits are a tremendous boon to low income families, businesses, and taxpayers all over the state. They broaden educational options for poor kids, let businesses directly help their communities, and for every student who chooses a private instead of a public school, they save taxpayers thousands of dollars. The maximum scholarship size allowed under the program will now be $3,950 (up from $3,750) – less than one third of total per pupil spending in Florida public schools (which was $12,263 in 2006-07, according to Richard Harbin of the Florida Dept. of Ed. – hat tip to my research assistant, Elizabeth Li).

The fact that parents are clamoring for a $4,000 scholarship to help their children escape from public schools that spend over $12,000 per year says a lot about the need for expanded educational options. No single system of schools can ever serve all children well. In education, as in so many other things, one size does not fit all.

Let’s hope governor Crist signs the new bill into law.

Expert Opinion

The back page of the Week in Review section of yesterday’s NYT features a symposium on “How to See This Mission Accomplished,” in which the Times asked nine experts to address problems going forward in Iraq.  Since at least five of the nine were enthusiastic backers of the war – and three work for the American Enterprise Institute – this is something like asking the captain of the Exxon Valdez* for his considered judgment on how best to conduct the cleanup.  Hey NYT: next time, why not consult someone who got it right

* Ironically enough, the Valdez’s Wikipedia entry places one “Able Seaman Robert Kagan” at the helm during the crash.  They’re everywhere

Ag Committee Chair Demands Higher Food Prices

Not content with a protected near monopoly of the domestic market, American sugar producers are demanding that Congress make their pot of subsidies and protection even sweeter.

Chairman of the House Agriculture Committee, Rep. Colin Peterson (D-Minn.), is pushing language in the latest proposed farm bill that would raise domestic price supports for sugar and mandate that sugar imports be used for ethanol production.

His proposals would virtually lock in an 85 percent share of the U.S. market for domestic sugar beet and cane growers, even though a number of foreign countries can grow sugar more cheaply than most American growers. And by the way, did I mention that Rep. Peterson’s district is among the nation’s top producers of sugar beets?

The Bush administration, to its credit, opposes Peterson’s changes in the farm bill. The sugar industry, of course, loves the idea. A spokesman for the pro-protection American Sugar Alliance told this morning’s Wall Street Journal, “We have an administration that seems more interested in supporting foreign producers, than producers right here in America.”

Notice the sugar industry doesn’t mention American consumers. U.S. agricultural policies should not be about favoring “our” producers over “theirs,” but about advancing such national interests as freedom, prosperity, and a more peaceful world. As we’ve explained in detail at the Center for Trade Policy Studies, the U.S. sugar program favors American sugar producers primarily at the expense of the rest of America. American families pay higher prices at the store, while U.S. producers that use sugar as an input — bakeries, food processors, restaurants, candy makers, etc. — incur higher costs because of our sugar program.

As we read daily in the newspaper about soaring food prices, this Congress is the verge of passing a farm bill designed explicitly to raise domestic food prices.

ACTE Endorses REAL ID Repeal

Joining the National Conference of State Legislatures, the Association of Corporate Travel Executives has endorsed S. 717, the Identification Security Enhancement Act of 2007. This bill would reinstitute a negotiated rulemaking process regarding identity security that was established in the 9/11-Commission-inspired Intelligence Reform and Terrorism Prevention Act.

XM-Sirius Rent-Seeking

The FCC’s review of the XM-Sirius merger is a perfect example of the type of quagmire that’s inevitably created when a government agency is given broad, discretionary authority over private businesses. Various special interest groups have proposed that the merger be subjected to a laundry list of requirements. Lefty groups want an open device mandate. A rent-seeker entrepreneur named Chester C. Davenport wants the merged entity to set aside 20 percent of its spectrum for minority-controlled broadcasting. There are a variety of other proposals to require the firm to lease spectrum to unaffiliated entities. Clear Channel is demanding that it be subjected to the same “indecency” regulations that now plague terrestrial radio.

There are good arguments against each of these proposals, and there are some plausible arguments for some of them as well. But what I find most problematic about the situation is the way the proposals are handled. We have a constitutional system of government in which Congress is supposedly in charge of writing laws, the executive branch is in charge of executing them, and the courts are in charge of interpreting them. This ensures that laws are written by the most politically-engaged branch—Congress—and interpreted by the most impartial branch—the courts.

But in this case, as in many others, Congress has effectively given the FCC its blessing to wear all three hats. It can dream up new “conditions” (read: regulations) for the merger focusing on virtually any subject that strikes its fancy. The conditions are specific to one company, so there’s ample scope for favoritism and arbitrary decision-making. And once the conditions have been announced, and XM-Sirius have been blackmailed into “accepting” them, the FCC effectively wears executive and judicial hats as well. Yes, supplicants before the FCC can and do appeal decisions to federal courts, and the FCC is sometimes overruled. But the courts tend to give the FCC relatively wide deference in its policy decisions, and firms that practice regularly before the FCC may be reluctant to too aggressively defend their prerogatives in the courts for fear of souring their relationship with the FCC going forward.

The fundamental problem (aside from the courts’ failure to require that lawmaking powers be limited to Congress as required by the Constitution) is the FCC’s baroque process for apportioning spectrum. The right way to handle it would be for XM, Sirius, and every other broadcaster to have a property right in the spectrum they use, which would entitle them to do as they please with that spectrum (as long as it didn’t interfere with other broadcasters) or to lease or sell the spectrum to anyone else. In a world with genuine property rights, spectrum would find its way to owner with the highest-valued use, and anyone who wanted to enter a market like satellite radio would be able to do so simply be purchasing spectrum rights in the appropriate bands. The FCC’s role would be limited to keeping track of who held which license and verifying that spectrum uses did not create interference with one another.

My suspicion is that in such a world, satellite radio would prove economically infeasible because the spectrum would be more valuable in other uses. But I don’t know, and the FCC’s soviet-style spectrum allocation process is certainly not a good way to figure it out. The FCC should approve the XM-Sirius merger without conditions. But the more important lesson is that, Congress should be moving toward genuine property rights in spectrum, so that the 21st-century wireless market ceases to be micro-managed by an anachronistic 20th-century bureaucracy.

Once we have a real market for spectrum, Congress may choose to enact general regulations governing the use of that spectrum. But the current system, in which the FCC has the arbitrary power to single out individual companies for arbitrary restrictions on virtually any subject the FCC’s commissioners happen to be concerned with, is deeply flawed. It’s not fair to companies that have the misfortune of attracting the FCC’s scrutiny, and it’s not good for consumers, who are deprived of the benefits of a robust and competitive market for spectrum.