Europeans Leading on Postal Privatization

While many European governments deserve criticism for their high tax rates and destructive welfare states, sometimes America is the nation that is lagging when it comes to free market reform.

Corporate tax rates are one example, since every European nation has a lower rate than America. Social Security reform is another area, since many European nations have funded systems based on personal accounts.

And, as the Wall Street Journal explains, the Europeans are also beating America when it comes to postal reform. Several nations already have eliminated government monopoly systems and others are heading in that direction, though backwards nations such as France are trying to block continent-wide liberalization:

Bulgaria, Estonia, Finland, Sweden and the U.K. have opened their postal markets completely; Germany and the Netherlands have said they plan to do so soon. Brussels began liberalization efforts back in 1997 and a 2002 law envisioned an open postal market by January 1, 2009.

Yet five years after that tentative deadline was set, and with 18 months still to go, the likes of France’s La Poste complain that they need more time to prepare. It’s unclear what exactly they will be able to accomplish in those extra two years that they couldn’t manage in the first dozen.

One safe bet is they’ll continue piling up easy profits to use in new businesses they’ve started. To take one example, La Poste, Deutsche Post and others have used the proceeds from their letters monopolies — a €90 billion business in Europe — to open banks.

In the meantime, consumers increasingly have to break the bank just to send a letter. In the 10 members of the EU-15 that haven’t completed or planned postal liberalization, the average stamp price rose by 7 European cents, or about 18%, between December 2001 and February 2007, according to data from the Free and Fair Post Initiative. In the five countries that have liberalized, the average price fell by 2 cents, or about 4%. Studies show that full market opening, including cross-border competition, could drive prices down by as much as 20% to 25%.

Earmarks

As annual spending bills wind their way through Congress this year, there are ongoing battles over earmarked funding for members’ pet projects.

To get a sense of what the battle is about, check out this newly released list of earmarks in the House Interior appropriations bill.

People scour such lists looking for embarrassing bridges to nowhere in Alaska and indoor rainforests in Iowa.

But the real issue is federalism, not earmarks. Many of these funding projects are not federal responsibilities at all. Look at all the local sewer facilities on the list under the EPA. Why can’t Seattle, Buffalo, and other cities fund their own toilet pipes?

Of course, they can. But the idea of federalism has disappeared from public discussion in an orgy of state and local lobbying of compliant Washington politicians. For history and analysis of this issue, see here

(Oh, wait a minute, take that back — my guy Jim Moran (D-VA) scored $700K to clean up Four Mile Run beside where I live in Northern Virginia. Nice job Jim! You’ve got my vote!) 

The Islamofascists’ Reign of Terror

The New York Times reports on American troops’ efforts to push Al Qaeda insurgents out of Baqaba, Iraq, and liberate residents from their strict rule:

The insurgents have imposed a strict Islamic creed, and some have even banned smoking, one resident told Capt. Jeff Noll, the commander of Company B of the First Battalion, 23rd Infantry, during his patrol through the neighborhood.

Banning smoking? President Bush is right — if we don’t stop them in Iraq, we’ll have to fight them in Manhattan, and Montgomery County, and San Francisco….

Voucher Use in Washington Wins Praise of Parents

 The headline for the New York Times article on the first review of the D.C. voucher program (summary, full report) is the headline I use here for this post. I’m pleasantly surprised, I have to say.

The NYT lead paragraph was almost correct as well, losing marks for lack of context. It mentions that parents who can choose a school for their children are much more satisfied, and that the choice students did not have consistently statistically significant academic gains. 

The vital context for this is that treatment effects from major education changes just aren’t expected in the first year. The NYT unfortunately also repeats the false claim that the evidence on voucher effects is not consistent. 

All scientific assessments of choice programs show positive gains, and nearly all of those studies show statistically significant gains. But it takes some time to get results, especially after a switch in schools that can be disruptive in various ways in the short-term. We have plenty of evidence that school choice improves student performance, and improves government schools as well.

The real news here is the immediate and very significant improvement in parental satisfaction across the board. The Washington Post, of course, buries the real news 14 paragraphs into the story.

In the one effect that should be expected in the first year, the voucher program has been a wild success. But that’s not the line the Post is helping school choice opponents push.

The Post prints a headline today that’s a lesson in how to slant the news while appearing on the surface to remain neutral. Here’s their headline: “Voucher Students Show Few Gains in First Year.” No one expected them to! Again, studies show choice has an effect, but it’s not magic fairy dust that makes students savants after the average of seven months they spent at a new school. And the numbers involved in this tiny program are, well, tiny. 

But the subtitle is the kicker, and combined it’s a despicable exercise in political activism masquerading as journalism; “D.C. Results Typical, Federal Study Says.” Here’s the trick; suggest, falsely, that it’s newsworthy that vouchers don’t immediately and massively increase student achievement, then suggest that choice programs typically don’t lead to improvements.

Chairman of the House education committee, George Miller (D-Calif.), echoed the Post and the NYT in a statement: “This report offers even more proof that private school vouchers won’t improve student achievement and are nothing more than a tired political gimmick.”

Miller should be ashamed of himself. And so should the education reporters who fail to give their readers context and crucial facts.

The D.C. voucher program is a life-line for low-income children. It’s sad to see their hometown paper helping handmaidens for the education-industrial complex in Congress try to cut that line to a better future. 

A Reason to be Against Donor Disclosure

Several interest groups (Public Citizen, Common Cause and Democracy 21) have lately been trying to persuade Congress to set up an independent ethics panel to police members. They also want Congress to allow outside groups (like themselves) to file ethics complaints with the panel.

A House task force now proposes to grant them their wish. However, the task force also requires any group filing an ethics complaint to the new panel to disclose its donors.

The interest groups are not amused. Craig Holman of Public Citizen told The Hill:  “you can imagine how upsetting this is to the donor community.”

I do not support an independent ethics panel. However, Holman is correct here. A group that filed a complaint would open its donors to retribution by the named member or by his party or allies in Congress. Disclosure might even discourage donors from supporting these interest groups, thereby burdening the contributors’ rights to association and speech.

In fact, I think we should extend Craig Holman’s point to other donors. People who contribute to the campaigns of challengers to incumbents should also not have to disclose their donations. After all, their contribution (like an ethics complaint) threatens a member of Congress and might well bring about retribution.

Sauces, gooses, ganders. If disclosure threatens the interests of the donors to certain influential interest groups that might irritate people in power, surely it also threatens those who contribute to challengers to incumbents. These donors, like your average Common Cause contributor, should also be free of the burden of revealing their political activities to those who might do them harm.

Laissez-Faire Health Care: Hilariously Misguided?

Ezra Klein offers a theory to explain my prediction that he will die a libertarian.  I’m going to keep my reasons for that prediction close to my vest.  But I will say that his recent comment about “intellectual disagreements” is not among them.

A few observations in response to his most recent post:

  1. A libertarian health policy would not prescribe $30,000 health insurance deductibles, or any size deductible. But Klein knows that.
  2. A patient on a gurney has no bargaining power. I know that.  Klein knows that. He knows that I know that. He also knows that most treatment settings are non-emergent. But let’s see if this straw man is really so easily razed. I’m guessing we could also agree that the patient has more bargaining power later, once his situation is no longer emergent. And I think we could likewise agree that a good way to protect the most vulnerable gurney-jockey from being gouged would be to make sure all gurney-jockeys care about the cost of their treatment (whether at the point of service or when they purchase their coverage).
  3. Best Buy and Sony are inapt. Think GEICO. Like Humana, GEICO is for-profit. Like Humana, GEICO takes its customers’ money and every claim paid is a loss to the company. Those incentives are the same.  Yet we don’t have an auto repair crisis. In fact, GEICO boasts on the radio that it pays claims so quickly, it steals other insurers’ customers. Why the difference?
  4. The key question is what type of system best reduces vulnerability. Is it a laissez-faire system, where (a) individuals would control the money now controlled by government and employers and (b) competition would ensure that insurers and providers could profit only by reducing others’ vulnerability?  Or is it a system with greater government involvement, where the link between self-interest and reducing others’ vulnerability is more attenuated?

Harsh Criticism for the Re-Packaged EU Constitution from a British Newspaper

The EU Constitution is being resuscitated by Europe’s political elites, and those elites are doing their best to figure out ways to bypass voters. British voters are the best chance of saving Europe from further centralization, but Tony Blair is maneuvering to avoid a referendum. An editorial from the Sun strongly denounces the EU Constitution and hopes that Gordon Brown will protect British interests:

Tony Blair faces a stark choice at his last EU summit. He can stand up for the country that trusted him with power in three general elections. Or he can sell us down the river to the faceless EU politicians and bureaucrats who run Europe … Mr. Blair’s vaunted “red lines” won’t protect the United Kingdom from the relentless erosion of power by our EU masters. Whatever written guarantees are offered in the coming days, Britain would be folding its hand into a European superstate … Gordon Brown may not be in Brussels — but he will have the final say on how the result is sold at home. We have been promised a referendum. The incoming Prime Minister cannot allow this deal to go through without one.

A columnist in the same paper outlines the many ways in which the EU Constitution gives more power to Brussels and threatens the UK’s more open economy:

…the Reform Treaty, is virtually the same as the rejected EU Constitution. It will rob us of powers to set our own laws and put industry back 30 years … Early drafts of the document show Britain will surrender 30 per cent of its voting power in EU meetings. This will make it far harder to stop barmy EU diktats becoming UK law.

Britain’s vetoes will be axed in as many as 51 areas … The power to set tax and spend policy could also be stripped away. The Commission also wants to rob us of our right to set social security payments. Experts say the draft Treaty would mean huge changes to British law. They say a Charter of Fundamental Rights would become more legally-binding than UK law. The Charter will also lumber Britain’s economy with job-destroying EU laws.