The Same Old K Street

Jeff Birnbaum, who covers lobbying for the Washington Post, which is sort of like covering the Pope for the Vatican Observer, writes about “the other K Street” in a lengthy article. “K Street,” of course, is shorthand–or if you believe Wikipedia, metonym–for the lobbying industry.

According to Birnbaum, “the other K Street” is a building along K Street that has become home to a dozen or so well-funded left-Democratic lobbies–Campaign for America’s Future, Americans United for Change, Progressive Majority, Ballot Initiative Strategy Center, USAction, MoveOn.org Political Action, etc. So that’s very different from the usual corporate lobbyists, right?

Well, let’s see. What K Street is really about is using political influence and the power of government to transfer resources from those who produced them to yourself or your clients. It’s about milking the taxpayers. It’s about using your political connections to impose your own agenda on the unorganized masses.

And by that definition, “the other K Street” fits right in with the corporate K Street. Special interests give them buckets of money, and they manipulate the political process on behalf of partisan, ideological, and interest-driven agendas–just like the corporate and right-wing lobbyists.

Michael Barone reminds us that it was Franklin D. Roosevelt’s aides who originally created “K Street” when they left the White House and went into business for themselves. They happily lobbied the permanent Democratic majority in Washington for the next 60 years or so. Now the taxpayers’ pinata is available to everybody.

The Global Flat Tax Revolution Continues

A column in Canada’s Globe and Mail reviews the successful shift to flat tax systems and appropriately notes that tax competition is a key reason for the adoption of better tax policy:

In one of its first acts last year as an independent country, Macedonia (population: two million) legislated radical tax reforms. On Jan. 1, 2007, the country introduced a flat-rate tax of 12 per cent on both personal and corporate income, matching the rate introduced two years ago by Georgia (population: 5.6 million). On Jan. 1, 2008, Macedonia will cut its rate to 10 per cent - and achieve one of the lowest tax rates in the world. Macedonia’s tax revenues will almost certainly rise. The country’s new, young (age: 36 years) free-market Prime Minister, Nikola Gruevski, cites the phenomenon of voluntary compliance that accompanies flat-tax regimes. “This reform will decrease tax evasion,” he says, “and encourage people to meet their obligations to the state.” As Russia (population: 144 million) vividly demonstrated when it adopted a flat tax (replacing a 40-per-cent rate on personal income with a 13-per-cent rate) in 2000, low rates are persuasive tax collectors. Russia’s revenues rose 25 per cent in the first year, 25 per cent in the second year, 15 per cent in the third year. People who violently resist getting scalped will submit voluntarily for a trim. …Around the world, tax rate competition is getting keener. Countries that resist flat-tax reform are nevertheless lowering rates. Poland (population: 37.5 million) has moved three-quarters of the way to a flat tax - with a single rate of 19 per cent for all corporate income, capital gains, dividends and self-employed individuals. Spain (population: 40 million) has introduced a flat rate of 18 per cent for all income derived from savings. Effective this year, Iceland (population: 300,000) taxes all personal income at a flat rate of 32 per cent - which appears high because it includes municipal as well as national taxes. It now taxes capital gains, dividends, interest income and rental income at a flat rate of 10 per cent.

Time for Taxpayers to Sing the Blues

Blue corn isn’t subsidized like white and yellow corn, and that’s just not right. Or so say the blue corn growers. Cindy Skrzycki’s “Regulators” column in the Washington Post today is the sort of thing that ought to make you a libertarian. So many lawyers writing so many regulations, with clauses and sub-clauses. And it’s all nonsense.

So here’s the problem:

Under the regulatory system that determines which crops qualify for inclusion in Department of Agriculture support programs, blue corn is an orphan. According to the department rulebook, it isn’t even considered corn because it’s not yellow or white, the only versions of the food that are eligible for federal agricultural loans and crop payments.

This means that farmers who grow blue corn, which is made into the blue-corn tortilla chips that many of us love to dip into a nice salsa, aren’t growing “real” corn, so they don’t qualify for loan or other support programs, according to the government. 

Now you might think this is no big deal since blue corn sells for about twice what white and yellow corn do. But the growers feel hurt and victimized and, you know, invisibilized. They want to be an official government-recognized crop. And, you know, get the loans and subsidies. Like popcorn got in 2003.

But fear not. Rep. Dennis Cardoza (D-Calif.), chairman of the House subcommittee on horticulture and organic agriculture (seriously), is listening. He’s promised the blue-corn growers that he’ll try to address their needs in the current farm bill.

And then taxpayers can subsidize premium organic blue corn, lest this great nation ever run out of blue-corn tortilla chips in a national emergency.

The Real “Reading First” Scandal

Secretary of Education Margaret Spellings will testify before a House Education Committee hearing tomorrow, and the hottest topic for her appearance on the hot-seat will be the federal “Reading First” program. A centerpiece of the No Child Left Behind act, Reading First is a billion-dollar-a-year initiative to improve language instruction in the early grades. The idea behind the program was to encourage districts to adopt scientifically proven teaching methods, but it seems to have netted roughly a million bucks for people on the Dept. of Ed.’s payroll in the process. The Department’s inspector general, John P. Higgins Jr., has made several criminal investigation referrals to the Justice Department as a result.

As government scandals go, this is tepid stuff. A million dollars? Individual states and school districts around the country have often mismanaged or defrauded taxpayers of comparable or larger sums.

The real Reading First scandal is that anyone would imagine that a bureaucratic school system bereft of competitors and immune to market incentives could be made to adopt and consistently implement effective educational practices on a vast scale, let alone sustain them over time or improve upon them.

Anyone familiar with the research on so-called systemic reform is aware that implementation quality matters as much or more than program selection. If teachers are not committed to and well trained in the selected methods, they will not effectively implement them and will not persevere with them over time.

A case in point is the federal ”Follow Through” experiment of the late 1960s and early 1970s, which put a score of different pedagogical methods in head-to-head competition. The number one method, by far, was called Direct Instruction, or Distar. As soon as “Follow Through” officially ended, most of the schools that had been using Distar abandoned it, and their test scores eventually fell back to pre-follow-through levels.

So the real question is, how do you simultaneously achieve all of the following:

  • Encourage the consistent identification and/or development of effective methods
  • Hire, train, and maintain a staff of teachers capable of properly implementing those methods
  • Ensure that, once adopted, effective methods are not displaced by the latest pedagogical fad

The only way to do that is to create powerful incentives that pressure school administrators and teachers to do these things. The only system that consistently creates these incentives is a competitive education marketplace. Until we have a market, dreams of the pervasive use of effective pedagogical methods in American education will remain just that: dreams.

England Becoming a Top-Flight Tax Haven

The UK-based Guardian reports that the number of “non-doms” has nearly doubled in three years. The phrase refers primarily to foreigners who move to the UK and are allowed to dodge any taxes on the income they earn in other jurisdictions. This policy is strongly opposed by leftists in the Labour Party, though Tony Blair obviously has chosen to leave it intact. And if the Guardian can be believed, Gordon Brown may decide to leave well enough alone when he moves into 10 Downing Street:

The number of people claiming non-domicile tax status has nearly doubled in three years, fuelling fears that Britain is becoming the world’s first onshore tax haven. …The tax break…is now increasingly used by City tycoons and overseas billionaires who are flocking to London to take advantage of a loophole that allows them to keep their vast fortunes intact. …Labour MP Stephen Pound has called on Sir Ronald Cohen, Gordon Brown’s closest ally in the City, to come clean over whether he benefits from non-domiciled tax status. Cohen, a substantial Labour donor who founded Apax Partners, Britain’s most successful private equity firm, exerts strong influence over the Chancellor. He has repeatedly refused to disclose his tax status.

The Latest from the Children’s Defense Fund

Or maybe a small child, judging by CDF’s fairly shameless pro-SCHIP campaign.

Turns out there is a solid case to be made that expanding SCHIP and Medicaid would leave us with more dead kids.  Of course, the ideological left won’t engage that debate. 

They’d rather just accuse their opponents of killing kittens.

Strategic Myopia, the Ongoing Saga

While the Bush administration has been busy fighting terrorism by spending half a trillion dollars and 3,400 American lives loosing and then trying to keep apart the various confessional, tribal, and ethnic factions in Iraq, the New York Times brings us grim news about a struggle that may have more direct relevance to protecting ourselves against the most pressing threat we’re likely to face in the coming years. Here are the first two paragraphs from the piece:

WASHINGTON, May 7 — Every week, a group of experts from agencies around the government — including the C.I.A., the Pentagon, the F.B.I. and the Energy Department — meet to assess Washington’s progress toward solving a grim problem: if a terrorist set off a nuclear bomb in an American city, could the United States determine who detonated it and who provided the nuclear material?

So far, the answer is maybe.

Not heartening.